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Oil and Energy stocks have continued to be a safe haven for investors this year and have consistently outperformed the broader market. Investors may once again be wondering if it’s time to take profits or if there is still more upside in the Oil and Energy sector.
Let’s take a look at three highly ranked Zacks stocks in the sector that still look poised for growth.
Cheniere Energy is an energy infrastructure business engaged in Liquefied Natural Gas distribution and marketing. Cheniere Energy is one of the only listed LNG export pure plays in the U.S.
Cheniere Energy earns a Zacks Rank #1 (Strong Buy) with earnings estimates on the rise. LNG earnings are expected to climb 205% this year and soar another 102% in FY23 to $19.68 per share. Sales are set to jump 100% this year but decline -18% in FY23 to $26.14 billion. Despite the slowing top line growth next year the company appears poised to excel by keeping operating costs low and revenue is expected to stay high following an excellent year.
Year to date LNG is up a stellar +68% to crush the S&P 500’s -22%. This has also outperformed the Oil & Gas U.S. Exploration Production Market’s +54%. Even better, over the last decade, LNG is up +1,081% to blast the benchmark and its Zacks Subindustry’s +12%.
Image Source: Zacks Investment Research
LNG currently trades around $170 a share and recently hit 52-week highs after blasting earnings expectations last week by 43% at $7.80 per share. At current levels, LNG has a forward P/E of 17.6X. Despite the impressive run over the last year, this is well below its decade-high of 1,259.5X and the median of 24.4X.
LNG has a unique niche and offers investors a modest 0.77% dividend yield at $1.32 per share. The Average Zacks Price Targets also suggest 16% upside from current levels.
Halliburton is one of the largest oilfield service providers in the world and sports a Zack Rank #1 (Strong Buy). Haliburton offers equipment, maintenance, engineering, and construction services to the energy, industrial and government sectors.
HAL is up +71% YTD to outperform the S&P 500 and its peer group’s +44% with notable competitors Baker Hughes (BKR - Free Report) and Schlumberger (SLB - Free Report) . Halliburton is becoming a leader in its industry with a strong performance over the last three years, up +84% to crush the benchmark and its peer group’s +59%.
Image Source: Zacks Investment Research
Halliburton stock is 10% off its 52-week highs, trading around $39 a share. HAL has a forward P/E of 18.5X. This is nicely below the industry average of 25.3X and well below its decade-high of 266X.
According to Zacks estimates, HAL earnings are expected to jump 92% at $2.08 a share in 2022. Fiscal 2023 earnings are expected to climb another 40%. Top line growth is expected as well, with sales set to rise 33% this year and another 16% in FY23 to $23.63 billion.
Halliburton’s Oil and Gas–Field Services is in the top 8% of over 250 Zacks Industries and the Average Zacks Price Target offers 15% upside from current levels. HAL also offers a respectable 1.25% dividend yield at $0.48 per share.
As a leading independent refiner, transporter, and marketer of petroleum products Marathon Petroleum (MPC - Free Report) is expected to have continued growth. The company operates in two segments, Pipeline Transportation and Refining and Marketing which includes 16 refineries in the west coast, gulf coast, and mid-continent regions of the U.S.
MPC is up +87% in 2022, with rising estimate revisions still making the stock worth a look. Trading around $119 per share, MPC has a P/E of 4.9X. This is on par with the industry average and from the nearby chart, we can see that MPC trades well below its high of 41.4X earlier in the year and the median of 10.2X.
Image Source: Zacks Investment Research
MPC recently hit 52-week highs last week after beating Q3 estimates by 15% at $7.81 per share. Marathon Petroleum’s earnings are now expected to climb an impressive 879% to $23.99 based on Zacks estimates. Fiscal 2023 earnings are expected to decline -43% following a tough to compete with year. However, earnings estimates for this year and FY23 continue to rise and have gone up over the last week after the company’s strong earnings report.
MPC currently lands a Zacks Rank #1 (Strong Buy) and its Oil and Gas-Refining and Marketing Industry is in the top 2%. MPC offers investors a 1.97% dividend yield at $2.32 per share and the Average Zacks Price Target still suggests 7% upside from current levels.
Bottom Line
Although Oil and Energy stocks have enjoyed impressive rallies throughout the year many stocks in the sector are still poised for growth. The sector is one of the few areas of the economy expected to see growth in FY23 and may continue to be a safe haven for investors amid an economic downturn with crude oil prices still near $90 a barrel and natural gas exportation still in high demand.
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3 Oil & Energy Stocks Still Poised for Growth
Oil and Energy stocks have continued to be a safe haven for investors this year and have consistently outperformed the broader market. Investors may once again be wondering if it’s time to take profits or if there is still more upside in the Oil and Energy sector.
Let’s take a look at three highly ranked Zacks stocks in the sector that still look poised for growth.
Cheniere Energy (LNG - Free Report)
Cheniere Energy is an energy infrastructure business engaged in Liquefied Natural Gas distribution and marketing. Cheniere Energy is one of the only listed LNG export pure plays in the U.S.
Cheniere Energy earns a Zacks Rank #1 (Strong Buy) with earnings estimates on the rise. LNG earnings are expected to climb 205% this year and soar another 102% in FY23 to $19.68 per share. Sales are set to jump 100% this year but decline -18% in FY23 to $26.14 billion. Despite the slowing top line growth next year the company appears poised to excel by keeping operating costs low and revenue is expected to stay high following an excellent year.
Year to date LNG is up a stellar +68% to crush the S&P 500’s -22%. This has also outperformed the Oil & Gas U.S. Exploration Production Market’s +54%. Even better, over the last decade, LNG is up +1,081% to blast the benchmark and its Zacks Subindustry’s +12%.
Image Source: Zacks Investment Research
LNG currently trades around $170 a share and recently hit 52-week highs after blasting earnings expectations last week by 43% at $7.80 per share. At current levels, LNG has a forward P/E of 17.6X. Despite the impressive run over the last year, this is well below its decade-high of 1,259.5X and the median of 24.4X.
LNG has a unique niche and offers investors a modest 0.77% dividend yield at $1.32 per share. The Average Zacks Price Targets also suggest 16% upside from current levels.
Halliburton (HAL - Free Report)
Halliburton is one of the largest oilfield service providers in the world and sports a Zack Rank #1 (Strong Buy). Haliburton offers equipment, maintenance, engineering, and construction services to the energy, industrial and government sectors.
HAL is up +71% YTD to outperform the S&P 500 and its peer group’s +44% with notable competitors Baker Hughes (BKR - Free Report) and Schlumberger (SLB - Free Report) . Halliburton is becoming a leader in its industry with a strong performance over the last three years, up +84% to crush the benchmark and its peer group’s +59%.
Image Source: Zacks Investment Research
Halliburton stock is 10% off its 52-week highs, trading around $39 a share. HAL has a forward P/E of 18.5X. This is nicely below the industry average of 25.3X and well below its decade-high of 266X.
According to Zacks estimates, HAL earnings are expected to jump 92% at $2.08 a share in 2022. Fiscal 2023 earnings are expected to climb another 40%. Top line growth is expected as well, with sales set to rise 33% this year and another 16% in FY23 to $23.63 billion.
Halliburton’s Oil and Gas–Field Services is in the top 8% of over 250 Zacks Industries and the Average Zacks Price Target offers 15% upside from current levels. HAL also offers a respectable 1.25% dividend yield at $0.48 per share.
Marathon Petroleum (MPC - Free Report)
As a leading independent refiner, transporter, and marketer of petroleum products Marathon Petroleum (MPC - Free Report) is expected to have continued growth. The company operates in two segments, Pipeline Transportation and Refining and Marketing which includes 16 refineries in the west coast, gulf coast, and mid-continent regions of the U.S.
MPC is up +87% in 2022, with rising estimate revisions still making the stock worth a look. Trading around $119 per share, MPC has a P/E of 4.9X. This is on par with the industry average and from the nearby chart, we can see that MPC trades well below its high of 41.4X earlier in the year and the median of 10.2X.
Image Source: Zacks Investment Research
MPC recently hit 52-week highs last week after beating Q3 estimates by 15% at $7.81 per share. Marathon Petroleum’s earnings are now expected to climb an impressive 879% to $23.99 based on Zacks estimates. Fiscal 2023 earnings are expected to decline -43% following a tough to compete with year. However, earnings estimates for this year and FY23 continue to rise and have gone up over the last week after the company’s strong earnings report.
MPC currently lands a Zacks Rank #1 (Strong Buy) and its Oil and Gas-Refining and Marketing Industry is in the top 2%. MPC offers investors a 1.97% dividend yield at $2.32 per share and the Average Zacks Price Target still suggests 7% upside from current levels.
Bottom Line
Although Oil and Energy stocks have enjoyed impressive rallies throughout the year many stocks in the sector are still poised for growth. The sector is one of the few areas of the economy expected to see growth in FY23 and may continue to be a safe haven for investors amid an economic downturn with crude oil prices still near $90 a barrel and natural gas exportation still in high demand.