Earnings estimates for TOTAL S.A. (TOT - Free Report) have been revised upward over the past 30 days. The Zacks Consensus Estimate for 2018 and 2019 earnings per share have moved up 1.74% and 3.6% to $5.26 and $5.70, respectively.
The company’s shares have rallied 20.2% in the last 12 months compared with Zacks-Oil and Gas - Integrated – International industry’s rise of 18.6%. TOTAL is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves and market capitalization. The company currently carries a Zacks Rank #2 (Buy).
Let’s focus on the factors that make TOTAL a profitable bet.
Positive Earnings Surprise History: TOTAL has surpassed the Zacks Consensus Estimate for earnings in two out of the trailing four quarters, the average being 1.28%.
VGM Score: TOTAL carries an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back-tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.
Strong Production Portfolio: The company has one of the best production growth profiles among the oil majors, characterized by an upstream portfolio with above industry average exposure to the faster growing hydrocarbon producing regions of the world. Owing to high-quality exploration and drilling activities, the company was able to achieve a reserve replacement rate of 95% in 2017 and more than 100% on an average during the last five years.
Focus on Acquisitions and Divestures: TOTAL continues to make strategic acquisitions and finalize agreements with existing operators in high potential areas. It entered into an agreement to acquire Direct Energie in the first quarter of 2018. Moreover, the company strengthened its presence in deep-water Gulf of Mexico with the Ballymore discovery and the acquired interests of Cobalt in the Anchor and North Platte discovery. The company also bought interests in Guyana and the Mediterranean Sea, offshore Lebanon. On the other hand, the company divests assets that are not in sync with its long-term objectives.
Recent Agreements: To enhance operations, TOTAL signed agreements with Sonangol, covering certain upstream and downstream operations in Angola. The company has been operating in Angola for the past seven decades and is the leading oil operator.
The agreement will allow the company to operate Block 48 ultra-deepwater resource offshore Angola and jointly develop a network of service. TOTAL also signed a Memorandum of Understanding with the Government of Oman to develop natural gas resources.
Other Stocks to Consider
A few other top-ranked stocks in the same sector are Azure Power Global Ltd. (AZRE - Free Report) , CNOOC Ltd. (CEO - Free Report) and Eni SpA (E - Free Report) .
While Azure Power and CNOOC sport a Zacks Rank #1 (Strong Buy), Eni SpA holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Azure Power came up with an average positive earnings surprise of 35.48% in the last four quarters. The Zacks Consensus Estimate for fiscal 2019 earnings has risen by 50% to 6 cents in the last 90 days.
CNOOC delivered an average positive earnings surprise of 20.72% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 16.9% to $19.67 in the last 90 days.
Eni SpA delivered an average positive earnings surprise of 56.37% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 22.6% to $2.39 in the last 90 days.
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