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5 Energy Stocks to Power Your Portfolio This Earnings Season
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The Q1 earnings season is picking pace with 30.8% of the S&P 500 companies having reported results, as of Apr 25. A total of 154 players belonging to the index recorded year-over-year earnings growth of 25.4% on 10.3% higher revenues.
This earnings season will likely see strong performances from the Energy sector. Around 16.7% of the S&P 500 energy players have reported results, as of Apr 25. These firms have seen year-over-year earnings growth of 190.9%, with 60% of the companies surpassing the Zacks Consensus Estimate.
Q1 Oil Price Performance Impressive
Per the U.S. Energy Information Administration, the average monthly price of West Texas Intermediate (WTI) crude for the month of January, February and March was recorded at $63.70 per barrel, $62.23 per barrel and $62.73 per barrel, respectively.
Notably, the commodity never crossed the $60 psychological mark in the 2015-2017 period. The production cut extension agreement by the OPEC players through 2018-end primarily supported the rally in crude.
Energy Sector to Flourish
For first-quarter 2018, we expect Energy to see year-over-year earnings growth of 61.2% on 15.5% revenue growth. Among the 16 Zacks sectors, Energy will likely outshine others, with Construction expected to be next with 43.4% earnings growth.
Energy is expected to be the key driver for S&P 500’s year-over-year earnings growth. Excluding Energy, the index’s first-quarter earnings growth is anticipated to drop to 18.6% from 20%. In terms of total profit, we expect Energy to earn $14.3 billion through the January-to-March quarter of 2018, significantly higher than each of the last four quarters.
The crude rally primarily supported the sector as profits of Energy companies largely depend on the commodity’s price.
How to Pick the Right Energy Stocks?
With a wide array of companies in the Energy sector muddling up the stock picking power, the Zacks methodology could offer some relief. One can narrow down the list using positive Zacks Earnings ESP as a guide, along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their next earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Please check our Earnings ESP Filter that enables you to come across stocks with the potential to outshine earnings estimates this reporting cycle.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Here are five energy stocks that are poised to beat estimates according to our methodology.
Headquartered in The Woodlands, TX, Anadarko Petroleum Corporation is a leading explorer of oil and natural gas with strong presence in the deepwater Gulf of Mexico.
The company has an Earnings ESP of +8.62% and a Zacks Rank #3. The Zacks Consensus Estimate for the to-be reported quarter earnings is pegged at 41 cents.
Anadarko Petroleum is set to report first-quarter results on May 1, after the closing bell.
Concho Resources Inc. , headquartered in Midland, TX, is an upstream energy player with focus on the lucrative Permian Basin.
The firm has an Earnings ESP of +1.04% and a Zacks Rank #3. The Zacks Consensus Estimate for earnings is pinned at 81 cents.
The company is set to report first-quarter results on May 1, after the closing bell.
Headquartered in Houston, TX, EOG Resources, Inc. (EOG - Free Report) is an oil and natural gas explorer with reserves across the United States, the United Kingdom, China and Trinidad.
EOG Resources has an Earnings ESP of +4.07% and a Zacks Rank #1.
The Zacks Consensus Estimate for earnings stands at $1.00 for the first quarter, which will be reported on May 4.
Diamondback Energy, Inc. (FANG - Free Report) , headquartered in Midland, TX, is a leading explorer of oil and natural gas primarily in the Permian Basin.
The first quarter looks bright for Diamondback, which has an Earnings ESP of + 2.69% and a Zacks Rank #3. The scheduled earnings release date for the company is May 8, after the closing bell.You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Houston, TX, Oasis Petroleum Inc. is a leading oil and gas explorer having strong presence in the Williston and Delaware Basins.
The company is slated to report first-quarter 2018 earnings on May 7, after the closing bell.
Oasis Petroleum has an Earnings ESP of +4.55% and a Zacks Rank #3. The Zacks Consensus Estimate for earnings is pegged at 6 cents.
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Image: Bigstock
5 Energy Stocks to Power Your Portfolio This Earnings Season
The Q1 earnings season is picking pace with 30.8% of the S&P 500 companies having reported results, as of Apr 25. A total of 154 players belonging to the index recorded year-over-year earnings growth of 25.4% on 10.3% higher revenues.
This earnings season will likely see strong performances from the Energy sector. Around 16.7% of the S&P 500 energy players have reported results, as of Apr 25. These firms have seen year-over-year earnings growth of 190.9%, with 60% of the companies surpassing the Zacks Consensus Estimate.
Q1 Oil Price Performance Impressive
Per the U.S. Energy Information Administration, the average monthly price of West Texas Intermediate (WTI) crude for the month of January, February and March was recorded at $63.70 per barrel, $62.23 per barrel and $62.73 per barrel, respectively.
Notably, the commodity never crossed the $60 psychological mark in the 2015-2017 period. The production cut extension agreement by the OPEC players through 2018-end primarily supported the rally in crude.
Energy Sector to Flourish
For first-quarter 2018, we expect Energy to see year-over-year earnings growth of 61.2% on 15.5% revenue growth. Among the 16 Zacks sectors, Energy will likely outshine others, with Construction expected to be next with 43.4% earnings growth.
Energy is expected to be the key driver for S&P 500’s year-over-year earnings growth. Excluding Energy, the index’s first-quarter earnings growth is anticipated to drop to 18.6% from 20%. In terms of total profit, we expect Energy to earn $14.3 billion through the January-to-March quarter of 2018, significantly higher than each of the last four quarters.
The crude rally primarily supported the sector as profits of Energy companies largely depend on the commodity’s price.
How to Pick the Right Energy Stocks?
With a wide array of companies in the Energy sector muddling up the stock picking power, the Zacks methodology could offer some relief. One can narrow down the list using positive Zacks Earnings ESP as a guide, along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising with their next earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Please check our Earnings ESP Filter that enables you to come across stocks with the potential to outshine earnings estimates this reporting cycle.
Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
Here are five energy stocks that are poised to beat estimates according to our methodology.
Headquartered in The Woodlands, TX, Anadarko Petroleum Corporation is a leading explorer of oil and natural gas with strong presence in the deepwater Gulf of Mexico.
The company has an Earnings ESP of +8.62% and a Zacks Rank #3. The Zacks Consensus Estimate for the to-be reported quarter earnings is pegged at 41 cents.
Anadarko Petroleum is set to report first-quarter results on May 1, after the closing bell.
Concho Resources Inc. , headquartered in Midland, TX, is an upstream energy player with focus on the lucrative Permian Basin.
The firm has an Earnings ESP of +1.04% and a Zacks Rank #3. The Zacks Consensus Estimate for earnings is pinned at 81 cents.
The company is set to report first-quarter results on May 1, after the closing bell.
Headquartered in Houston, TX, EOG Resources, Inc. (EOG - Free Report) is an oil and natural gas explorer with reserves across the United States, the United Kingdom, China and Trinidad.
EOG Resources has an Earnings ESP of +4.07% and a Zacks Rank #1.
The Zacks Consensus Estimate for earnings stands at $1.00 for the first quarter, which will be reported on May 4.
Diamondback Energy, Inc. (FANG - Free Report) , headquartered in Midland, TX, is a leading explorer of oil and natural gas primarily in the Permian Basin.
The first quarter looks bright for Diamondback, which has an Earnings ESP of + 2.69% and a Zacks Rank #3. The scheduled earnings release date for the company is May 8, after the closing bell.You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Houston, TX, Oasis Petroleum Inc. is a leading oil and gas explorer having strong presence in the Williston and Delaware Basins.
The company is slated to report first-quarter 2018 earnings on May 7, after the closing bell.
Oasis Petroleum has an Earnings ESP of +4.55% and a Zacks Rank #3. The Zacks Consensus Estimate for earnings is pegged at 6 cents.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>