Earnings estimates for Anadarko Petroleum Corporation (APC - Free Report) have been revised upward over the past 30 days, reflecting analyst’s confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings has moved 1.4% and 3.3% north to $3.00 and $3.76 per share, respectively.
Woodlands, TX-based Anadarko Petroleum Corporation is one of the largest independent oil and natural gas exploration and production (E&P) companies of the world. The company is primarily engaged in the exploration, development, production, gathering, processing and marketing of natural gas, crude oil, condensate and natural gas liquids (NGLs).
The stock has 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.
Let’s focus on the factors that make Anadarko Petroleum an attractive stock to hold on to for greater returns.
Price Appreciation: Shares of Anadarko Petroleum have soared 65.1% in a year’s time, outperforming the industry’s rally of 20.8%. The stock carries a Zacks Rank #2 (Buy).
Positive Earnings Surprise History: The company has an impressive earnings surprise history. The bottom line surpassed the Zacks Consensus Estimate in two of the last four reported quarters, the average positive surprise being 89.2%.
Capex Plan: The company has a planned capital expenditure in the range of $4,200-$4,600 million for 2018. It is going to invest nearly 85% of its planned outlay in three U.S. development areas. Focus on these areas is likely to further improve oil production of the company from the present levels.
Planned capital expenditure is expected to deliver a three-year 10-14% compounded growth rate for oil. The ongoing improvement in oil prices will help the company multiply its gain as the volume of oil production is expected to increase from the current levels.
Share Buyback & Dividend Hike: The company has been undertaking initiatives to increase the value of shareholders. On Jun 29, 2018, the company completed its previous $3-billion share repurchase authorization. The recent authorization created another coffer of $1 billion for shares to be repurchased before the end of June 2019.
Also, the company’s board members approved to hike its quarterly dividend to 25 cents from 5 cents, skyrocketing 400%.
Other Stocks to Consider
Some other top-ranked stocks from the Zack Oil and Gas Industry are Amedisys, Inc. (AMED - Free Report) , ConocoPhillips (COP - Free Report) and HollyFrontier Corporation (HFC - Free Report) , each sporting a Zacks Rank of #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amedisys pulled off an average positive surprise of 10.6% in all the trailing four quarters. The company’s earnings are expected to grow 18.6% over the 3-5 year term period.
ConocoPhillips delivered an average four-quarter beat of 226.9%. The company’s earnings are expected to grow 9% over the 3-5 year period.
HollyFrontier came up with an average four-quarter earnings surprise of 41.3%. The company’s earnings are expected to grow 8.9% over the 3-5 year period.
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