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Here's Why Hold Strategy is Apt for EOG Resources (EOG)
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EOG Resources, Inc. (EOG - Free Report) is a leading upstream energy player. In the past year, the stock has gained 9.9% against a 6.2% decline of the composite stocks belonging to the industry.
Factors Working in Favor
The price of West Texas Intermediate crude, trading at more than the $90 per barrel mark again, is highly favorable for upstream operations. EOG Resources, currently carrying a Zacks Rank #3 (Hold), is well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned significant cash to its stockholders. With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, aiding its bottom line.
Risks
Rising lease and well-operating costs are hurting the company’s bottom line. Also, being an exploration and production company, EOG’s business is highly exposed to extreme volatility in oil and gas prices.
Stocks to Consider
Better-ranked players in the energy space include Magellan Midstream Partners LP , Profire Energy, Inc. (PFIE - Free Report) and Helix Energy Solutions Group, Inc. (HLX - Free Report) . While Magellan Midstream and Profire Energy carry a Zacks Rank #2 (Buy), Helix Energy sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Magellan Midstream has extensive petroleum midstream infrastructures that will be needed in the United States for decades to come. The business model of the partnership is resilient to commodity price fluctuations and derives stable fee-based revenues.
Profire Energy is mainly focused on the oil and gas industry’s upstream, midstream and downstream transmission segments. PFIE has boasted that its legacy business is doing extremely well, thanks to the resumption of maintenance work of exploration and production players.
Helix Energy is a leading player and is well-poised to grow in the favorable crude pricing environment since it primarily provides specialty services to the offshore energy industry.
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Here's Why Hold Strategy is Apt for EOG Resources (EOG)
EOG Resources, Inc. (EOG - Free Report) is a leading upstream energy player. In the past year, the stock has gained 9.9% against a 6.2% decline of the composite stocks belonging to the industry.
Factors Working in Favor
The price of West Texas Intermediate crude, trading at more than the $90 per barrel mark again, is highly favorable for upstream operations. EOG Resources, currently carrying a Zacks Rank #3 (Hold), is well-placed to capitalize on the promising business scenario. It has an estimated 11,500 net undrilled premium locations, resulting in a brightened production outlook.
EOG Resources is strongly committed to returning capital to shareholders. Since transitioning to premium drilling, the company has returned significant cash to its stockholders. With the employment of premium drilling, EOG will be able to reduce its cash operating costs per barrel of oil equivalent, aiding its bottom line.
Risks
Rising lease and well-operating costs are hurting the company’s bottom line. Also, being an exploration and production company, EOG’s business is highly exposed to extreme volatility in oil and gas prices.
Stocks to Consider
Better-ranked players in the energy space include Magellan Midstream Partners LP , Profire Energy, Inc. (PFIE - Free Report) and Helix Energy Solutions Group, Inc. (HLX - Free Report) . While Magellan Midstream and Profire Energy carry a Zacks Rank #2 (Buy), Helix Energy sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Magellan Midstream has extensive petroleum midstream infrastructures that will be needed in the United States for decades to come. The business model of the partnership is resilient to commodity price fluctuations and derives stable fee-based revenues.
Profire Energy is mainly focused on the oil and gas industry’s upstream, midstream and downstream transmission segments. PFIE has boasted that its legacy business is doing extremely well, thanks to the resumption of maintenance work of exploration and production players.
Helix Energy is a leading player and is well-poised to grow in the favorable crude pricing environment since it primarily provides specialty services to the offshore energy industry.