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Here's Why Hold Strategy is Apt for EOG Resources (EOG) Stock
EOG Resources, Inc. (EOG - Free Report) is a leading upstream energy player. For 2024, the firm has witnessed upward earnings estimate revisions over the past 30 days, while the Zacks Consensus Estimate for this year is pegged at $12.58 per share.
Factors Working in Favor
The price of West Texas Intermediate crude, trading at more than the $70 per barrel mark again, is still highly favorable for upstream operations. EOG Resources, a leading oil and natural gas exploration and production company currently carrying a Zacks Rank #3 (Hold), is thus well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since it transitioned to premium drilling, the company has returned significant cash to stockholders. With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, thereby aiding its bottom line.
Although EOG Resources is committed to returning capital to shareholders, it has consistently been paying lower dividend yields than the composite stocks belonging to the energy sector over the past five years.
Rising lease and well-operating costs are hurting the company’s bottom line.
Stocks to Consider
Better-ranked players in the energy space include Energy Transfer LP (ET - Free Report) , Marathon Petroleum Corp (MPC - Free Report) and Antero Midstream Corporation (AM - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Energy Transfer generates stable cashflows, banking on its midstream, intrastate and interstate transportation and storage assets. The midstream assets are engaged in transporting and storing natural gas, oil and refined petroleum products. Over the past 60 days, Energy Transfer has witnessed upward earnings estimate revisions for 2023 and 2024.
Marathon Petroleum is a well-known name in the energy space. MPC is the operator of the largest refining system in the nation.
Antero Midstream generates stable cashflows, banking on its midstream assets involved in gathering, compression, processing and fractionation activities. The properties are centered around the prolific Appalachian Basin. Over the past 30 days, Antero Midstream has witnessed upward earnings estimate revisions for 2023.