There very well may be a bullish market ahead for natural gas stocks, and analysts most definitely see it…
Enter Coterra Energy (CTRA), a formidable player in the natural gas realm where vast reserves, cost-effective operations, and strong financial standing come together to offer up a confident performer.
Coterra masterfully distributes its free cash flow to shareholders through a mix of regular dividends, buybacks, and occasional special dividends. CTRA’s performance history is also a sign of reliability.
Coterra Energy will attract any income-focused investors who enjoy high future returns…
Coterra Energy (CTRA) is one of the strongest choices in the energy sector right now. CTRA stands out as a top player due to its large reserves and solid balance sheet, making it a reliable income play. With a market cap of $21 billion, CTRA is among the biggest players in the industry, primarily generating revenue from natural gas sales, supplemented by oil and NGLs (natural gas liquids).
CTRA‘s reserves are expected to last between 15 and 20 years, and it continues to explore new discoveries to replenish its inventory. Additionally, CTRA benefits from strong price realization, capturing around 100% of the WTI price and approximately 90% of natural gas in the Marcellus basin. With plans to reduce activity
in the Marcellus and redirect resources to the promising Permian and Anadarko basins, this can contribute to CTRA’s projected oil production growth of 5% per year without increasing capital spending.
By successfully maintaining healthy business metrics, CTRA is in an excellent position to return cash to shareholders. It offers a 7.94% annual dividend yield with a $0.20 per share quarterly payout. Moreover, CTRA repurchased 11 million shares totaling $268 million, representing 76% of the free cash flow returned to shareholders. It has also done a hell of a consistent job of beating analysts’ earnings projections.
Most recently, CTRA beat EPS and revenue by margins of 24.11% and 13.09%, respectively. CTRA reported EPS of $0.87 per share vs. $0.70 per share as expected and revenue of $1.78 billion vs. $1.57 billion as expected. CTRA also boasts significant earnings beats for all of fiscal year 2022.
For the present quarter, CTRA is projected to report $1.3 billion in sales at $0.37 per share. It is currently up by 9.28% year-to-date and trades around the bottom of its existing 52-week range, which leaves room for growth. CTRA has a volatility-safe beta score of 0.27 and a 10-day average trading volume of 6.54 million shares. As assigned by analysts, CTRA has a median price target of $29, with a high of $39 and a low of $25, giving it an upside potential of more than 45% of its current price.
Considering its strategic buybacks and dividends, the company is clearly committed to its shareholders, and given the positive outlook on natural gas prices and CTRA‘s strengths as a top-tier player, it is a compelling buy for investors with a bullish view of the energy sector.
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