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Here's Why Hold Strategy is Apt for Pioneer (PXD) Stock Now
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Pioneer Natural Resources Company is likely to see earnings growth of 135.5% this year. Also, this leading independent oil and gas exploration and production company’s shares have surged 24% year to date.
What’s Favoring the Stock?
West Texas Intermediate crude price, trading at more than $75 per barrel, is highly favorable for oil explorers and producers. Pioneer Natural is well placed to capitalize on the handsome pricing scenario. PXD, carrying a Zacks Rank #3 (Hold), has a strong presence in the low-cost oil-rich Midland basin — a sub-basin of the broader Permian. The upstream energy player has a huge inventory of premium wells that will likely generate significant returns for the company.
Pioneer Natural is focused on returning capital to shareholders. This includes a substantial variable dividend along with a strong base dividend. It is also employing opportunistic share repurchases to reward shareholders.
Pioneer Natural has considerably lower exposure to debt capital than the composite stocks belonging to the industry. This reflects PXD’s strong balance sheet on which the firm can rely to sail through the volatile energy businesses.
Risks
Despite all those positive factors, like all upstream players, PXD’s overall operations are significantly exposed to volatility in oil and natural gas prices.
To make its operations more stable, Phillips 66 is giving more attention to midstream (pipelines), renewables and chemicals businesses. It also has strong refining operations.
Precision Drilling is a well-known name in the energy space for offering its clients access to an extensive fleet of Super Series drilling rigs. Its services also include offering well service rigs. With high commodity prices, demand for PDS’ drilling rigs is favorable.
NexTier Oilfield Solutionsis also a well-known U.S. land oilfield service player. With higher exploration and production by upstream companies, demand for NexTier Oilfield’s diverse set of well completion and production services is handsome.
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Here's Why Hold Strategy is Apt for Pioneer (PXD) Stock Now
Pioneer Natural Resources Company is likely to see earnings growth of 135.5% this year. Also, this leading independent oil and gas exploration and production company’s shares have surged 24% year to date.
What’s Favoring the Stock?
West Texas Intermediate crude price, trading at more than $75 per barrel, is highly favorable for oil explorers and producers. Pioneer Natural is well placed to capitalize on the handsome pricing scenario. PXD, carrying a Zacks Rank #3 (Hold), has a strong presence in the low-cost oil-rich Midland basin — a sub-basin of the broader Permian. The upstream energy player has a huge inventory of premium wells that will likely generate significant returns for the company.
Pioneer Natural is focused on returning capital to shareholders. This includes a substantial variable dividend along with a strong base dividend. It is also employing opportunistic share repurchases to reward shareholders.
Pioneer Natural has considerably lower exposure to debt capital than the composite stocks belonging to the industry. This reflects PXD’s strong balance sheet on which the firm can rely to sail through the volatile energy businesses.
Risks
Despite all those positive factors, like all upstream players, PXD’s overall operations are significantly exposed to volatility in oil and natural gas prices.
Stocks to Consider
Some better-ranked players in the energy space are Phillips 66 (PSX - Free Report) , Precision Drilling Corporation (PDS - Free Report) and NexTier Oilfield Solutions Inc. . All the stocks carry a Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
To make its operations more stable, Phillips 66 is giving more attention to midstream (pipelines), renewables and chemicals businesses. It also has strong refining operations.
Precision Drilling is a well-known name in the energy space for offering its clients access to an extensive fleet of Super Series drilling rigs. Its services also include offering well service rigs. With high commodity prices, demand for PDS’ drilling rigs is favorable.
NexTier Oilfield Solutionsis also a well-known U.S. land oilfield service player. With higher exploration and production by upstream companies, demand for NexTier Oilfield’s diverse set of well completion and production services is handsome.