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Here's Why Hold Strategy is Apt for EOG Resources (EOG) Stock
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EOG Resources, Inc. (EOG - Free Report) , a leading exploration and production company, is likely to see earnings growth of almost 7% this year.
Factors Working in Favor
The price of West Texas Intermediate crude is at more than the $70 per barrel mark again, which is highly favorable for upstream operations. EOG Resources, currently carrying a Zacks Rank #3 (Hold), is well-placed to capitalize on the promising business scenario. It has significant undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned significant cash to its stockholders. Notably, from 1999 through 2024, the company has committed to raising its regular dividend at a compound annual growth rate of 21%. It has never suspended or lowered its dividend, even during business turmoil, reflecting solid underlying business.
With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, aiding its bottom line.
However, being engaged in upstream business, the company is highly exposed to extreme volatility in oil and natural gas prices.
Sunoco, the leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts.
The Williams Companies is well-poised to capitalize on the mounting demand for clean energy since it engages in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, the company connects premium basins in the United States to the key market. WMB’s assets can meet 30% of the nation’s consumption of natural gas, which is utilized for heating purposes and clean-energy generation. Thus, the company will be generating stable fee-based revenues.
Western Midstream Partners has a stable business model, banking on its midstream assets. With new productions coming online and activities in the Delaware Basin intensifying, there is a notable uptick in total throughput for natural gas, crude oil and natural gas liquids. Moreover, the partnership has impressive free cash flow conversions and has witnessed upward earnings estimate revisions for 2024 over the past 30 days.
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Here's Why Hold Strategy is Apt for EOG Resources (EOG) Stock
EOG Resources, Inc. (EOG - Free Report) , a leading exploration and production company, is likely to see earnings growth of almost 7% this year.
Factors Working in Favor
The price of West Texas Intermediate crude is at more than the $70 per barrel mark again, which is highly favorable for upstream operations. EOG Resources, currently carrying a Zacks Rank #3 (Hold), is well-placed to capitalize on the promising business scenario. It has significant undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned significant cash to its stockholders. Notably, from 1999 through 2024, the company has committed to raising its regular dividend at a compound annual growth rate of 21%. It has never suspended or lowered its dividend, even during business turmoil, reflecting solid underlying business.
With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, aiding its bottom line.
However, being engaged in upstream business, the company is highly exposed to extreme volatility in oil and natural gas prices.
Stocks to Consider
Some better-ranked companies are Sunoco LP (SUN - Free Report) , The Williams Companies, Inc. (WMB - Free Report) and Western Midstream Partners, LP (WES - Free Report) . While Sunoco LP sports a Zacks Rank #1 (Strong Buy), The Williams Companies and Western Midstream Partners carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco, the leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts.
The Williams Companies is well-poised to capitalize on the mounting demand for clean energy since it engages in transporting, storing, gathering and processing natural gas and natural gas liquids.
With its pipeline networks spread across more than 30,000 miles, the company connects premium basins in the United States to the key market. WMB’s assets can meet 30% of the nation’s consumption of natural gas, which is utilized for heating purposes and clean-energy generation. Thus, the company will be generating stable fee-based revenues.
Western Midstream Partners has a stable business model, banking on its midstream assets. With new productions coming online and activities in the Delaware Basin intensifying, there is a notable uptick in total throughput for natural gas, crude oil and natural gas liquids. Moreover, the partnership has impressive free cash flow conversions and has witnessed upward earnings estimate revisions for 2024 over the past 30 days.