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Here's Why EOG Resources (EOG) is an Attractive Investment Bet

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EOG Resources, Inc. (EOG - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024 over the past seven days.

Factors Working in Favor

The price of West Texas Intermediate crude, trading at more than the $85 per barrel mark again, is highly favorable for upstream operations. EOG Resources, currently carrying a Zacks Rank #2 (Buy), is well-placed to capitalize on the promising business scenario. It has significant 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. Notably, since 1999 through 2023, the company has committed to raise its regular dividend at a compound annual growth rate of 22%. It has never suspended or lowered its dividend, even during business turmoil, reflecting solid underlying business.

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.

Other Stocks to Consider

Other energy space includes Kinder Morgan, Inc. (KMI - Free Report) , Profire Energy, Inc. (PFIE - Free Report) and Pioneer Natural Resources Company . While Kinder Morgan and Profire Energy carry a Zacks Rank #2, Pioneer Natural sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

With its operating interests in oil and gas pipeline networks spread across 83,000 miles, Kinder Morgan is a leading energy infrastructure company in North America. It derives most of its earnings from take-or-pay contracts, generating 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.

Pioneer Natural 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 massive inventory of premium wells that will likely generate significant returns for the company.


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