Twelve Oil & Gas Plays Worth a Look Now
Despite controversy over the process known as fracking, and despite pullbacks resulting from the recent market volatility, shares of the following seven oil and gas companies are trading more than twice where they were a year ago. These are all dividend payers as well.
Apco Oil & Gas (NASDAQ: APAGF) is up about 195% from a year ago, though it has pulled back more than 17% in the past month. This has been one of the best-performing stocks of the past 30 years. Revenue and total assets have increased year over year since 2006. The Tulsa, Okla.-based company sports a market cap of $558.4 million, a dividend yield of 0.1% and a return on equity of 24.9%. The stock has outperformed BP (NYSE: BP) year to date, as well as over the past five years.
Cabot Oil & Gas (NYSE: COG) shares are trading about 128% higher year over year, up more than 76% year to date. Cabot was one of three companies subpoenaed last week by the New York attorney general over the profitability and life spans of natural gas wells. This S&P 500 component has a market cap of $6.9 billion and a dividend yield of 0.2%. Its long-term EPS growth forecast is 90.5%. Year to date, the stock has outperformed Goodrich (NYSE: GR) and Range Resources (NYSE: RRC), which were also subpoenaed.
Delek U.S. Holdings (NYSE: DK) is more than 104% higher year over year, but has pulled back more than 21% in the past month. The Brentwood, Tenn.-based petroleum refiner and marketer recently reported its “most profitable quarter in four years.” Delek U.S. Holdings has a market cap of $769.9 million and a dividend yield of 1.1%. The stock has outperformed competitors such as Valero Energy (NYSE: VLO) and Western Refining (NYSE: WNR) year to date.
EV Energy Partners (NASDAQ: EVEP) is up about 106% year over year, more than 44% in the past six months. EnerVest, the operator and general partner for EVEP, recently signed long-term joint venture agreements with Chesapeake Energy (NYSE: CHK) to develop Utica shale. Houston-based EV Energy Partners also posted strong second-quarter results. Its market cap is $2.2 billion and its dividend yield is 4.8%. The stock has outperformed competitors such as Linn Energy (NYSE: LINE) year to date.
HollyFrontier (NYSE: HFC) shares are trading almost 153% higher than a year ago. The company recently posted the most profitable quarter in its history due to the effects of significantly higher refinery gross margins. This Dallas-based independent petroleum refiner has a market cap of $7.0 billion, a dividend yield of 0.9% and a return on equity of 42.7%. The stock has also outperformed competitors Valero Energy and Western Refining year to date.
RPC (NYSE: RES) is up about 103% year over year, but down about 8% in the past three months. This provider of oilfield services said earlier this month that it had hired Goldman Sachs (NYSE: GS) to advise on a potential sale of the company. Possible buyers include Schlumberger (NYSE: SLB) and Patterson-UTI Energy (NASDAQ: PTEN). RPC has a market cap of $2.2 billion and a dividend yield of 1.5%. The stock has outperformed both of those suitors over the past six months.
W&T Offshore (NYSE: WTI) is up about 112% year over year, despite a more than 34% pullback in the past month. This Houston-based developer of oil and natural gas properties in the Gulf of Mexico recently completed the acquisition of properties from Shell Offshore. Its market cap is $1.4 billion and the dividend yield is 0.9%. Its P/E ratio is less than the industry average. The stock has outperformed competitor Newfield Exploration (NYSE: NFX) year to date.
Oil & Gas ETFs
Traders interested in oil and gas exchange traded funds might want to consider the following trades:
- ProShares Ultra Oil & Gas (NYSE: DIG): up more than 39% in the past year
- SPDR S&P Oil & Gas Exploration & Production (NYSE: XOP): up more than 25% in the past year
- Oil Services HOLDRs (NYSE: OIH): up almost 23% in the past year
Traders looking for a hedge may want to consider these alternate positions:
- ProShares UltraShort Oil & Gas (NYSE: DUG): up more than 45% in the past month
- ProShares Short Oil & Gas (NYSE: DDG) : up more than 22% in the past month
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