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Here's Why You Must Invest in Cactus (WHD) Stock Right Now
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Cactus Inc. (WHD - Free Report) is expected to see an earnings growth of 147.2% in 2022.
Shares of Cactus, currently sporting a Zacks Rank #1 (Strong Buy), have gained 24.3% in the past year compared with 12.5% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
Factors Favoring the Stock
Cactus manufactures, designs and sells wellhead and pressure-control equipment. The products are utilized by clients for drilling and completing onshore oil and natural gas wells. With a market cap of $4.3 billion, the company creates long-term value for shareholders.
Cactus generates significant cash flows by selling and renting wellhead and pressure-control equipment. Due to the rising customer drilling activities, Cactus has been witnessing higher sales of its wellhead and production-related equipment. This will get translated into increased cash flows.
For the first nine months of 2022, the company reported cash flow from operating activities of $78.6 million, higher than $52.1 million in the year-ago period.
Cactus is ahead of most peers since its highly-engineered products can improve pad drilling and completion efficiencies. Along with the enhancement of safety measures, the most advanced wellhead and frac solutions offered by the company can deliver significant time savings. The advanced wellhead and frac solutions can save more than 30 hours of rig time per well.
The company expects the pace of the addition of rigs in oil and gas resources to remain healthy, considering that the pricing environment of commodities is supportive. Being a manufacturer and designer of highly engineered wellhead and pressure-control equipment, Cactus expects revenue growth to continue across all of its business lines this year.
Cactus has a strong balance sheet, with no bank debt outstanding as of Sept 30, 2022. At the end of the third quarter, the company had cash and cash equivalents of $320.6 million. This will provide it with immense financial flexibility.
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP’s third-quarter 2022 earnings per share of 38 cents beat the Zacks Consensus Estimate of 36 cents.
PUMP is expected to see an earnings rise of 145.3% in 2022. As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides it a potential lifeline amid the challenging operating environment.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA’s third-quarter 2022 earnings per share of $9.28 beat the Zacks Consensus Estimate of $7.82.
Murphy USA is expected to report an earnings surge of 80.9% for 2022. MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the fuel retailer has approved a repurchase authorization of up to $1 billion, which can be completed by Dec 31, 2026.
Patterson-UTI Energy (PTEN - Free Report) is one of the largest North America land drilling contractors, having a large, high-quality fleet of drilling rigs. PTEN’s third-quarter 2022 adjusted net profit of 28 cents per share beat the Zacks Consensus Estimate of 19 cents.
Patterson-UTI is expected to report an earnings surge of 131% for 2022. PTEN doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. PTEN also increased its share repurchase authorization to $300 million.
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Here's Why You Must Invest in Cactus (WHD) Stock Right Now
Cactus Inc. (WHD - Free Report) is expected to see an earnings growth of 147.2% in 2022.
Shares of Cactus, currently sporting a Zacks Rank #1 (Strong Buy), have gained 24.3% in the past year compared with 12.5% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
Factors Favoring the Stock
Cactus manufactures, designs and sells wellhead and pressure-control equipment. The products are utilized by clients for drilling and completing onshore oil and natural gas wells. With a market cap of $4.3 billion, the company creates long-term value for shareholders.
Cactus generates significant cash flows by selling and renting wellhead and pressure-control equipment. Due to the rising customer drilling activities, Cactus has been witnessing higher sales of its wellhead and production-related equipment. This will get translated into increased cash flows.
For the first nine months of 2022, the company reported cash flow from operating activities of $78.6 million, higher than $52.1 million in the year-ago period.
Cactus is ahead of most peers since its highly-engineered products can improve pad drilling and completion efficiencies. Along with the enhancement of safety measures, the most advanced wellhead and frac solutions offered by the company can deliver significant time savings. The advanced wellhead and frac solutions can save more than 30 hours of rig time per well.
The company expects the pace of the addition of rigs in oil and gas resources to remain healthy, considering that the pricing environment of commodities is supportive. Being a manufacturer and designer of highly engineered wellhead and pressure-control equipment, Cactus expects revenue growth to continue across all of its business lines this year.
Cactus has a strong balance sheet, with no bank debt outstanding as of Sept 30, 2022. At the end of the third quarter, the company had cash and cash equivalents of $320.6 million. This will provide it with immense financial flexibility.
Other Key Picks
Investors interested in the energy sector might look at the following companies that also presently flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP’s third-quarter 2022 earnings per share of 38 cents beat the Zacks Consensus Estimate of 36 cents.
PUMP is expected to see an earnings rise of 145.3% in 2022. As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides it a potential lifeline amid the challenging operating environment.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA’s third-quarter 2022 earnings per share of $9.28 beat the Zacks Consensus Estimate of $7.82.
Murphy USA is expected to report an earnings surge of 80.9% for 2022. MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the fuel retailer has approved a repurchase authorization of up to $1 billion, which can be completed by Dec 31, 2026.
Patterson-UTI Energy (PTEN - Free Report) is one of the largest North America land drilling contractors, having a large, high-quality fleet of drilling rigs. PTEN’s third-quarter 2022 adjusted net profit of 28 cents per share beat the Zacks Consensus Estimate of 19 cents.
Patterson-UTI is expected to report an earnings surge of 131% for 2022. PTEN doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. PTEN also increased its share repurchase authorization to $300 million.