There’s a lot for investors to think about as we continue to experience stock market turbulence. Despite further sanctions against Moscow, Russia’s aggression towards Ukraine persists. Investors are on the edge of their seats due to the chaos. It’s no secret that after Russia invaded Ukraine, oil prices and global stock markets fluctuated drastically. Oil prices rose to $105 per barrel at one point, while natural gas futures jumped more than 50%.
With ripples in the energy markets, traders and investors may be looking for some of the best energy stocks to purchase. After all, Russia is the world’s second-largest natural gas producer and third-largest oil producer. As a result, it would be incredibly difficult for any country to substantially replace Russia’s natural gas supply to Europe in a short amount of time. It’s easy to see why energy stocks have been one of the hottest trades in the aftermath of this overseas conflict.
When energy prices are high, some experts believe it to be a chance to take some gains off the table. Whether or not you agree with that assessment, the sector appears to be prospering. Overall, considering the industry’s current headwind, I’ll be covering a few stocks to keep an eye on in March 2022.
Let’s look at three buy-rated, well-performing energy stocks that would make for smart portfolio picks:
Ovintiv Inc (OVV)
Ovintiv (OVV), formerly known as Encana, is an energy producer. The business is concentrating its efforts on expanding its multi-basin portfolio of oil, natural gas liquids, and natural gas producing services. It primarily serves customers in the United States and Canada. In that context, the energy firm employs around 1,900 people. OVV has been on an upward trend, increasing by more than 70% in the last year.
OVV, financially, had a tremendous 2021, despite a couple of earnings misses. According to the company’s financial report, full-year net earnings were $1.38 billion, compared to a loss of $642 million the previous year. As a result, profits per diluted share of common stock for the entire year were $5.32. In addition, OVV has kept busy, producing an average of 534,000 barrels of oil per day yearly. OVV’s present quarter so far shows us $2.1 billion in sales, at $2.17 per share. OVV pays a dividend yield of 1.70%, with a quarterly payout of 20 cents per share. The consensus price target for OVV from the analysts that provide 12-month predictions is 52.00, with a high of 62.00 and a low of 42.00. The forecast reflects an increase of 9.59%, and analysts agree on OVV’s firm buy rating.
SM Energy Co (SM)
SM Energy (SM) is a company whose primary business is oil, gas, and natural gas liquids acquisition, exploration, and production in Texas. In 1908, the company was founded in Denver, Colorado. The Midland Basin and South Texas are home to SM‘s activities. Its Midland Basin holdings cover 81,000 net acres in West Texas’ Permian Basin. Furthermore, its South Texas businesses have around 155,000 net acres of properties. SM’s stock has increased by more than 130% in the last year.
For the most recent quarter, SM earned $424.9 million in net profits, a significant improvement over the prior year’s loss of $165.2 million. In addition, earnings per share came in at $3.43, more than expected. SM brought in $855 million in sales during the quarter, exceeding Wall Street’s expectations of $631.5 million. Aside from that, average daily oil output increased by 22% from 2020, making it the company’s biggest ever when it comes to production volume. SM impressively bested the experts’ EPS and revenue projections for each fiscal quarter of 2021, not to mention boasting year-over-year numbers all in the green. SM pays a modest dividend yield of 0.053%. The median price target for SM from the analysts that provide 12-month price projections is 44.00, with a high of 57.00 and a low of 23.00. The median estimate is up 16.59% from current pricing, and SM has received a well-earned buy rating.
Kinder Morgan Inc (KMI)
Kinder Morgan Inc (KMI) is one of North America’s leading energy infrastructure firms. Over 80,000 miles of pipelines and 144 terminals are owned or operated by the firm. For the most part, these pipelines convey natural gas, gasoline, crude oil, and carbon dioxide, among other things. Its terminals, for example, store and handle petroleum products and chemicals. On record, as of late last year, KMI has approximately 10,600 employees. It was founded by Richard Kinder and William Morgan in 1997, and it is headquartered in Houston, Texas.
In January, KMI generated consistent results, ending 2021 on a high financial note. The company’s net income was $637 million, up from $607 million in 2020. For 2022, the corporation plans to earn $2.5 billion in net income. In the first quarter of 2021, they crushed EPS projections by 143.89% and revenue expectations by 71.33%. KMI took off from that massive earnings beat and hasn’t looked back. Shareholders can take comfort in knowing that KMI currently pays an impressive dividend yield of 6.14%, with a quarterly payout of 27 cents per share. Its current fiscal quarter (until they report again) gives us a healthy $3.4 billion in sales, with an EPS of 27 cents per share. The consensus price target for KMI among the analysts who provide 12-month price estimates is 19.00, with a high of 22.00 and a low of 17.00. The consensus estimate reflects an increase of 8.08% over the stock’s most recent price, and the experts are telling investors to buy and hold this affordable stock.
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