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Here's Why Cimarex (XEC) Stock is a Must Buy at the Moment

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We are upbeat about Cimarex Energy Co’s prospects and believe it is a promising pick right now.

The company currently carries a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best opportunities for investors.

Let’s take a look at the other factors that make this upstream energy player an attractive bet.

Cimarex is among the leading explorers and producers of oil and natural gas with footprint across Permian Basin and Mid-Continent resources in the domestic market.

Permian Basin has a significant contribution toward oil and natural gas production growth in the United States. Among the three sub basins of Permian, Cimarex has strong presence in the Delaware Basin comprising premium inventory of horizontal drilling wells. Following advanced completion techniques and the opportunity to drill long laterals wells, the company’s overall prospects in the Permian seem bright. Importantly, with an aim to boost its presence in the Permian basin, the company agreed to acquire smaller rival Resolute Energy Corp in a transaction estimated at $1.6 billion.  

The company’s Mid-Continent operations comprise resources in the Woodford and Meramec shale plays, located in the Anadarko Basin. Huge horizontal drilling opportunities in the resources have brightened the company’s prospects.

With West Texas Intermediate (WTI) oil price trading a little above $50 per barrel mark, the company’s oil producing activities in the Permian Basin seem profitable as the break-even crude price in the play is considered lower than $30 per barrel — estimated by Pioneer Natural Resources Company.

Moreover, Cimarex’s net operating cash flows surged 36.7% to $1.5 billion in the last 12 months. Also, we expect the company to report earnings growth of 54.2% and 19.3% in 2018 and 2019, respectively.

Cimarex Energy Co Price and Consensus

 

Cimarex Energy Co Price and Consensus | Cimarex Energy Co Quote

Other Stocks to Consider

Other prospective players in the energy space are TC PipeLines, LP , Enterprise Products Partners L.P. (EPD - Free Report) . Both the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.    

TC PipeLines beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 15.6%.

Enterprise Products surpassed the Zacks Consensus Estimate in the last four quarters, the average positive earnings surprise being 9.3%.

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