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Boost Your Portfolio With These 3 Top-Ranked Oil Stocks
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Second-quarter results have given us a clear picture that as compared to the year-ago comparable period, when the energy sector lost money, companies belonging to the space have generated earnings. This turnaround has depicted that energy companies are gradually coming out from the trap of the coronavirus pandemic since the long-term outlook for fuel demand is encouraging. This is driving oil prices, thereby brightening up prospects for oil exploration and production companies.
Jump in Oil Price
On Aug 23, oil price jumped more than 5%, thanks primarily to weaker dollar. This is because the commodity is cheaper to holders of other currencies. Thus, price of oil increased after seven days of losing streak. The price of West Texas Intermediate (WTI) crude has again crossed the $65-per-barrel benchmark, turning around from last week when the commodity plunged 9% to mark the biggest week of losses in more than nine months.
The rapidly-spreading infectious delta variant of coronavirus has been weighing on oil price since countries are considering new lockdown measures. Overall, short-term fuel demand looks cloudy but with rolling out of coronavirus vaccines across the world, long-term outlook continues to remain rosy.
Rising Rig Count
Oil explorers and producers are returning continuously to shale plays since the long-term picture looks bright. In its recent weekly release, Baker Hughes Company (BKR - Free Report) reported that the count of oil rigs in the United States has increased for three weeks in a row.
The weekly release reported that Permian — the most prolific basin in the United States — recorded oil rig tally of 246 for the week ended Aug 20, higher than the prior-week count of 244. The tally for oil drilling rigs in the basin increased for two straight weeks.
Oil Stocks in the Radar
It seems like an ideal time to include oil stocks in one’s portfolio. Since selecting the right companies from the stock universe is not an easy job, we are employing out proprietary Stock Screener to zero down on three prospective stocks. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Dallas, TX, MatadorResources Company (MTDR - Free Report) has a strong footprint in the liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. Shares of this leading upstream energy player have gained 123.2% so far this year, backed by investors’ excitement about strong second-quarter results. In the June quarter, the company’s average daily oil equivalent total production rose 26% sequentially, beating the guidance for an increment of 19 to 22%.
The company has repaid $100 million of borrowings outstanding under its reserves-based credit facility in the June quarter. The fact that Matador continues to improve its capital efficiency is also aiding its stock price. The Zacks Consensus Estimate for 2021 earnings per share has witnessed upward revisions in the past 30 days. So, the stock should keep soaring.
EOG Resources, Inc. (EOG - Free Report) , headquartered in Houston, TX, has premium drilling locations in all prolific shale plays in the United States, including the Delaware basin, a sub-basin of the broader Permian. In 2021, the company expects to produce a total of 793.8 thousand oil equivalent barrels per day (MBoe/d) to 836.1 MBoe/d, suggesting an increment from 753.8 MBoe/d in 2020. Thus, increasing production amid rising oil price scenario is likely to aid the company’s stock price, which has gained 35.7% so far this year.
Devon Energy Corp. (DVN - Free Report) has a strong footprint in the prolific Delaware Basin. The company expects its free cashflow to expand in the second half of this year as compared to the first half backed by increasing production, declining capital spending and corporate costs. So far this year, the company has gained 72.5% and is well placed to gain further. Backed by strong results in the June quarter, the leading upstream energy player has declared a fixed-plus-variable dividend of 49 cents per share, reflecting an increase of 44% from the prior quarter.
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Boost Your Portfolio With These 3 Top-Ranked Oil Stocks
Second-quarter results have given us a clear picture that as compared to the year-ago comparable period, when the energy sector lost money, companies belonging to the space have generated earnings. This turnaround has depicted that energy companies are gradually coming out from the trap of the coronavirus pandemic since the long-term outlook for fuel demand is encouraging. This is driving oil prices, thereby brightening up prospects for oil exploration and production companies.
Jump in Oil Price
On Aug 23, oil price jumped more than 5%, thanks primarily to weaker dollar. This is because the commodity is cheaper to holders of other currencies. Thus, price of oil increased after seven days of losing streak. The price of West Texas Intermediate (WTI) crude has again crossed the $65-per-barrel benchmark, turning around from last week when the commodity plunged 9% to mark the biggest week of losses in more than nine months.
The rapidly-spreading infectious delta variant of coronavirus has been weighing on oil price since countries are considering new lockdown measures. Overall, short-term fuel demand looks cloudy but with rolling out of coronavirus vaccines across the world, long-term outlook continues to remain rosy.
Rising Rig Count
Oil explorers and producers are returning continuously to shale plays since the long-term picture looks bright. In its recent weekly release, Baker Hughes Company (BKR - Free Report) reported that the count of oil rigs in the United States has increased for three weeks in a row.
The weekly release reported that Permian — the most prolific basin in the United States — recorded oil rig tally of 246 for the week ended Aug 20, higher than the prior-week count of 244. The tally for oil drilling rigs in the basin increased for two straight weeks.
Oil Stocks in the Radar
It seems like an ideal time to include oil stocks in one’s portfolio. Since selecting the right companies from the stock universe is not an easy job, we are employing out proprietary Stock Screener to zero down on three prospective stocks. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Dallas, TX, MatadorResources Company (MTDR - Free Report) has a strong footprint in the liquid-rich Delaware Basin’s Wolfcamp and Bone Spring plays. Shares of this leading upstream energy player have gained 123.2% so far this year, backed by investors’ excitement about strong second-quarter results. In the June quarter, the company’s average daily oil equivalent total production rose 26% sequentially, beating the guidance for an increment of 19 to 22%.
The company has repaid $100 million of borrowings outstanding under its reserves-based credit facility in the June quarter. The fact that Matador continues to improve its capital efficiency is also aiding its stock price. The Zacks Consensus Estimate for 2021 earnings per share has witnessed upward revisions in the past 30 days. So, the stock should keep soaring.
EOG Resources, Inc. (EOG - Free Report) , headquartered in Houston, TX, has premium drilling locations in all prolific shale plays in the United States, including the Delaware basin, a sub-basin of the broader Permian. In 2021, the company expects to produce a total of 793.8 thousand oil equivalent barrels per day (MBoe/d) to 836.1 MBoe/d, suggesting an increment from 753.8 MBoe/d in 2020. Thus, increasing production amid rising oil price scenario is likely to aid the company’s stock price, which has gained 35.7% so far this year.
Devon Energy Corp. (DVN - Free Report) has a strong footprint in the prolific Delaware Basin. The company expects its free cashflow to expand in the second half of this year as compared to the first half backed by increasing production, declining capital spending and corporate costs. So far this year, the company has gained 72.5% and is well placed to gain further. Backed by strong results in the June quarter, the leading upstream energy player has declared a fixed-plus-variable dividend of 49 cents per share, reflecting an increase of 44% from the prior quarter.