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Here's Why Matador (MTDR) is an Attractive Investment Bet Now

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Matador Resources Company (MTDR - Free Report) has witnessed upward earnings estimate revisions for 2021 and 2022 in the past 30 days. Also, this independent energy company’s stock price has surged 103.3% year to date versus the industry’s rise of 47.4%.

Factors Favoring the Stock

The price of West Texas Intermediate crude, which is trading above $64 per barrel (at pre-pandemic levels), has improved significantly from the negative territory touched in April 2020. The momentum is likely to continue since the coronavirus vaccine rollout will possibly help the economy recover strongly this year, thereby aiding fuel demand.

The recent rally in oil price has mostly been supported by OPEC+ (OPEC and its non-OPEC partners) since the cartel and its allies extend production cut in April. Under the agreement reached on Thursday, following a meeting through videoconferencing between OPEC led by Saudi Arabia and Russia-led non-OPEC producers, it has been decided by majority of the OPEC+ members to keep their output unchanged.

Overall, the massive improvement in oil price is definitely a boon for oil explorers and producers and Matador Resources, having a strong footprint in liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays, is well placed to capitalize on the favorable pricing scenario.

Amid improving commodity pricing scenario, the upstream player’s plan to increase oil production in 2021 will generate additional cashflow. The company, carrying a Zacks Rank #1 (Strong Buy), projects this year’s total oil production in the range of 17.2 to 17.8 million barrel, suggesting a 10% year-over-year improvement.

Other Stocks to Consider

Other prospective players in the energy space include EOG Resources, Inc. (EOG - Free Report) , Pioneer Natural Resources Company (PXD - Free Report) and Diamondback Energy, Inc. (FANG - Free Report) . While EOG Resources and Pioneer Natural carry a Zacks Rank #2 (Buy),Diamondback sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources is likely to see earnings growth of 206% in 2021.

Pioneer Natural has seen upward estimate revisions for 2021 earnings in the past 30 days.

Diamondback is likely to see earnings growth of 55% in 2021.

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