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Here's Why RPC (RES) is an Attractive Investment Bet Right Now
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RPC, Inc. (RES - Free Report) has witnessed upward estimate revisions for 2022 and 2023 earnings in the past 30 days.
The leading upstream energy firm, with a Zacks Rank #1 (Strong Buy), has gained 30.5% in the past year, surpassing the 28.8% rise of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
The West Texas Intermediate crude price, which is currently hovering around $75 per barrel, has significantly improved over the past year. Global fuel demand has improved significantly, supported by strong economic growth.
The strong oil price scenario is encouraging customers to increase drilling activities, which might raise the company’s oilfield service demand. This is because RPC provides specialized oilfield services and equipment to almost all prospective oil and gas shale plays in the United States.
RPC expects its customers to respond to the favorable commodity pricing scenario. Hence, the company anticipates continued drilling and completion activities as it begins the first quarter of 2023. This will translate into higher demand for its oilfield services and secure incremental cash flows. RPC expects to capitalize on the improving oilfield service demand.
The company’s balance sheet strength is commendable. With no debt load, RPC had cash and cash equivalents of $126.4 million at the fourth-quarter end. This reflects the company’s strong balance sheet that provides it with massive financial flexibility.
RPC is strongly focused on returning capital to shareholders. The company’s board of directors increased its regular quarterly cash dividend from 2 cents per share to 4 cents per share. It has the financial capabilities to make investments and generate strong cash flows.
Thus, RES, one of the leading oilfield service providers, is poised for an upside in the coming days.
Halliburton Company (HAL - Free Report) reported a fourth-quarter 2022 adjusted net income per share of 72 cents, surpassing the Zacks Consensus Estimate of 67 cents. The outperformance reflects stronger-than-expected profit from both its divisions.
HAL is expected to see earnings growth of 43.7% in 2023. In more good news for investors, Halliburton raised its quarterly dividend by 33.3% to 16 cents per share (or 64 cents per share annualized).
Valero Energy Corporation (VLO - Free Report) reported fourth-quarter 2022 adjusted earnings of $8.45 per share, beating the Zacks Consensus Estimate of $7.45 per share. The strong quarterly results were driven by increased refinery throughput volumes and a higher refining margin.
Valero can benefit from the Gulf Coast export volumes as fuel demand recovery gets support from Asia economies. The Gulf Coast contributed 59.4% to the total throughput volume in the fourth quarter of 2022.
Liberty Energy Inc. (LBRT - Free Report) announced fourth-quarter 2022 earnings per share of 82 cents, which handily beat the Zacks Consensus Estimate of 71 cents. The outperformance reflects the impact of strong execution and increased service pricing.
LBRT is expected to see an earnings surge of 61.1% in 2023. As part of its shareholder return policy, LBRT repurchased $125 million of its stock at an average price of $15.29 apiece since July and reinstated a quarterly cash dividend of 5 cents in the fourth quarter.
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Here's Why RPC (RES) is an Attractive Investment Bet Right Now
RPC, Inc. (RES - Free Report) has witnessed upward estimate revisions for 2022 and 2023 earnings in the past 30 days.
The leading upstream energy firm, with a Zacks Rank #1 (Strong Buy), has gained 30.5% in the past year, surpassing the 28.8% rise of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
The West Texas Intermediate crude price, which is currently hovering around $75 per barrel, has significantly improved over the past year. Global fuel demand has improved significantly, supported by strong economic growth.
The strong oil price scenario is encouraging customers to increase drilling activities, which might raise the company’s oilfield service demand. This is because RPC provides specialized oilfield services and equipment to almost all prospective oil and gas shale plays in the United States.
RPC expects its customers to respond to the favorable commodity pricing scenario. Hence, the company anticipates continued drilling and completion activities as it begins the first quarter of 2023. This will translate into higher demand for its oilfield services and secure incremental cash flows. RPC expects to capitalize on the improving oilfield service demand.
The company’s balance sheet strength is commendable. With no debt load, RPC had cash and cash equivalents of $126.4 million at the fourth-quarter end. This reflects the company’s strong balance sheet that provides it with massive financial flexibility.
RPC is strongly focused on returning capital to shareholders. The company’s board of directors increased its regular quarterly cash dividend from 2 cents per share to 4 cents per share. It has the financial capabilities to make investments and generate strong cash flows.
Thus, RES, one of the leading oilfield service providers, is poised for an upside in the coming days.
Other Stocks to Consider
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Halliburton Company (HAL - Free Report) reported a fourth-quarter 2022 adjusted net income per share of 72 cents, surpassing the Zacks Consensus Estimate of 67 cents. The outperformance reflects stronger-than-expected profit from both its divisions.
HAL is expected to see earnings growth of 43.7% in 2023. In more good news for investors, Halliburton raised its quarterly dividend by 33.3% to 16 cents per share (or 64 cents per share annualized).
Valero Energy Corporation (VLO - Free Report) reported fourth-quarter 2022 adjusted earnings of $8.45 per share, beating the Zacks Consensus Estimate of $7.45 per share. The strong quarterly results were driven by increased refinery throughput volumes and a higher refining margin.
Valero can benefit from the Gulf Coast export volumes as fuel demand recovery gets support from Asia economies. The Gulf Coast contributed 59.4% to the total throughput volume in the fourth quarter of 2022.
Liberty Energy Inc. (LBRT - Free Report) announced fourth-quarter 2022 earnings per share of 82 cents, which handily beat the Zacks Consensus Estimate of 71 cents. The outperformance reflects the impact of strong execution and increased service pricing.
LBRT is expected to see an earnings surge of 61.1% in 2023. As part of its shareholder return policy, LBRT repurchased $125 million of its stock at an average price of $15.29 apiece since July and reinstated a quarterly cash dividend of 5 cents in the fourth quarter.