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Reasons to Add Plains All American (PAA) to Your Portfolio Now
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Plains All American Pipeline’s (PAA - Free Report) systematic investments to expand operations, joint ventures, cost-saving initiatives and strong presence in the Permian Basin will further drive its performance. Given its strong growth opportunities, the company makes for a solid investment option in the oils-energy sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2023 earnings per unit has moved up 2.5% in the past 60 days to $1.21.
The Zacks Consensus Estimate for 2023 revenues is pegged at $67.5 billion, indicating year-over-year growth of 17.8%.
The company delivered an average earnings surprise of 11.5% in the last four quarters.
Debt Position
Currently, Plains All American’s total debt to capital is 37.2%, much better than the industry’s average of 52.6%. As of Mar 31, 2023, the firm’s total long-term liabilities amounted to $8,607 million compared with $8,676 million as of Dec 31, 2022, indicating that the firm is reducing its outstanding debt.
The times interest earned ratio at the end of first-quarter 2023 was 5.3. The ratio, being greater than one, reflects the company’s ability to meet future debt obligations without difficulties.
Systematic Investments
Plains All American maintains a systematic capital investment strategy to expand its operations through organic growth initiatives. It currently has some new projects in resource-rich regions.
For 2023, the company projects an investment capital of $420 million and a maintenance capital of $205 million. It is currently focusing on smaller projects to improve returns across its system.
Expanding Operation
Plains All American is gradually expanding operations in the Permian Basin to capitalize on the improving demand. Annual production in the Permian Basin is expected to remain stable in the next few years, and the partnership is poised to benefit from the rise in production from the Permian region with a gradual revival in oil and natural gas demand.
The firm announced the formation of W2W Pipeline joint venture with the subsidiaries of ExxonMobil and Lotus Midstream, LLC. W2W Pipeline has started operations and the firm owns a 20% interest in this project.
Price Performance
In the last three months, the Plains All American stock returned 10.4% compared with the industry’s average 2% growth.
The Zacks Consensus Estimate for MAXN’s 2023 earnings per share (EPS) indicates year-over-year growth of 101.7%. It delivered an average earnings surprise of 36.7% in the last four quarters.
The Zacks Consensus Estimate for PED’s 2023 EPS indicates a year-over-year increase of 333.3%. It delivered an average earnings surprise of 22.2% in the last four quarters.
The Zacks Consensus Estimate for EPM’s fiscal 2023 EPS indicates a year-over-year increase of 15.6%. It delivered an average earnings surprise of 38.4% in the last four quarters.
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Reasons to Add Plains All American (PAA) to Your Portfolio Now
Plains All American Pipeline’s (PAA - Free Report) systematic investments to expand operations, joint ventures, cost-saving initiatives and strong presence in the Permian Basin will further drive its performance. Given its strong growth opportunities, the company makes for a solid investment option in the oils-energy sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projections & Surprise History
The Zacks Consensus Estimate for 2023 earnings per unit has moved up 2.5% in the past 60 days to $1.21.
The Zacks Consensus Estimate for 2023 revenues is pegged at $67.5 billion, indicating year-over-year growth of 17.8%.
The company delivered an average earnings surprise of 11.5% in the last four quarters.
Debt Position
Currently, Plains All American’s total debt to capital is 37.2%, much better than the industry’s average of 52.6%. As of Mar 31, 2023, the firm’s total long-term liabilities amounted to $8,607 million compared with $8,676 million as of Dec 31, 2022, indicating that the firm is reducing its outstanding debt.
The times interest earned ratio at the end of first-quarter 2023 was 5.3. The ratio, being greater than one, reflects the company’s ability to meet future debt obligations without difficulties.
Systematic Investments
Plains All American maintains a systematic capital investment strategy to expand its operations through organic growth initiatives. It currently has some new projects in resource-rich regions.
For 2023, the company projects an investment capital of $420 million and a maintenance capital of $205 million. It is currently focusing on smaller projects to improve returns across its system.
Expanding Operation
Plains All American is gradually expanding operations in the Permian Basin to capitalize on the improving demand. Annual production in the Permian Basin is expected to remain stable in the next few years, and the partnership is poised to benefit from the rise in production from the Permian region with a gradual revival in oil and natural gas demand.
The firm announced the formation of W2W Pipeline joint venture with the subsidiaries of ExxonMobil and Lotus Midstream, LLC. W2W Pipeline has started operations and the firm owns a 20% interest in this project.
Price Performance
In the last three months, the Plains All American stock returned 10.4% compared with the industry’s average 2% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same sector are Maxeon Solar Technologies (MAXN - Free Report) , Pedevco (PED - Free Report) and Evolution Petroleum (EPM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MAXN’s 2023 earnings per share (EPS) indicates year-over-year growth of 101.7%. It delivered an average earnings surprise of 36.7% in the last four quarters.
The Zacks Consensus Estimate for PED’s 2023 EPS indicates a year-over-year increase of 333.3%. It delivered an average earnings surprise of 22.2% in the last four quarters.
The Zacks Consensus Estimate for EPM’s fiscal 2023 EPS indicates a year-over-year increase of 15.6%. It delivered an average earnings surprise of 38.4% in the last four quarters.