The natural gas industry features some high-quality businesses with profitable stocks. The top players are long-standing, competitive firms that often offer dividends.
Among the big names in the natural gas space are Chesapeake Energy (CHK), NextEra Energy (NEE), and Occidental Petroleum (OXY). Many stocks can be found in the sector, though, and hedge funds love them.
The top players aren’t always the most profitable, though, are they?
One stock, in particular, excels as an income opportunity, boasting consistent dividends, a solid balance sheet, and the most competitive pricing among its peers…
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… However, a significant factor in its greatness lies in its beta score, which is 0.27. Any stock with a score under 1.00 is considered safe from broader market volatility—the lower the beta, the safer the stock. With a market cap of $21 billion, CTRA is also among the most prominent players in the industry.
CTRA benefits from strong price realization, and with plans to redirect its activities, its projected oil production growth is 5% per year (without increasing capital spending). Also, by maintaining healthy business metrics, CTRA is in a great position to return cash to shareholders. It offers a 7.94% annual dividend yield with a $0.20 ($0.80/year) per share quarterly payout.
Earnings seasons haven’t been a problem. Last on record: CTRA beat EPS and revenue by 24.11% and 13.09% margins, 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. CTRA also shows serious earnings gains for all of fiscal 2022.
CTRA is projected to report $1.3 billion in sales at $0.37 per share for the present quarter. It is currently up by 10.44% year-to-date and trades close to the bottom of its existing 52-week range, which leaves room for growth. As assigned by analysts who give 12-month forecasts, CTRA has a median price target of $29, with a high of $39 and a low of $25, giving it an upside potential of almost 45% based on its current price.
An Ideal PEG (price/earnings/growth) ratio is between 0 and 1, reflecting the stock’s viability while being undervalued. CTRA enjoys a PEG ratio of 0.29x, which suggests it is significantly undervalued. This is compared to the S&P 500’s -0.5x and -2.19x for the oil industry as a whole.
Will this ugly scandal doom Biden in 2024?
In February 2022, Joe Biden made the most dangerous mistake any President has made in the past 150 years.
If it all plays out like I’m predicting…
Here’s what Monica Crowley, Trump’s Assistant Secretary of the Treasury…
…said to Fox News about Biden’s growing problem…
“It would be a complete implosion of…the American economic system.”
“If you think inflation is bad right now, just wait.
“We would lose our economic dominance…
There’s still time to protect your money.
But you can’t wait.
P.S. Biden’s mistake has kicked off what I believe will be the biggest wealth transfer in the history of our nation. Most will lose. But a few will gain – see how to protect yourself here.
This “peeing car” is at the center of an $11.7 trillion energy revolution
Goldman Sachs says this will be 10X bigger than the electric vehicle market.
Elon Musk terrified. Tesla could be finished. But early investors could make a fortune.
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