#8 - Anadarko Petroleum Corporation (NYSE:APC)
Anadarko Petroleum Corporation (NYSE: APC) - Anadarko saw its U.S. onshore oil volume surge by 47% in the second quarter, but they missed on earnings coming in $0.02 per share below what analysts expected. At $0.54 per share, they still came in $0.02 cents above the prior quarter. Even with the miss, there's a lot to like about Anadarko. First of all, they had to revise their future spending upwards because of the recent rise in crude prices. Normally this would be a drag on a company, but Anadarko is anticipating generating what the company termed "very high returns" on the $250 million increase to its mid-year budget. The company is also active in leasing land in the Powder River Basin of Wyoming one of the major oil and gas basins in the Rocky Mountain area and right next door to Anadarko's existing operation in Colorado's DJ Basin. As a company that is generating strong production, having the ability to return cash to its shareholders and still has the resources to continue to acquire new drilling targets, Anadarko is well positioned even if oil prices drop back to 2017 levels. At the levels being projected, this company is a must buy.
About Anadarko Petroleum
Anadarko Petroleum Corporation engages in the exploration, development, production, and marketing of oil and gas properties. It operates through three segments: Exploration and Production, WES Midstream, and Other Midstream. The company explores for and produces oil, natural gas, and natural gas liquids (NGLs).
Read More - Current Price
- $72.77
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
The big question heading into 2019 is where oil prices will go. While some industry analysts foresee prices holding at their current level of around $70/barrel. Others are calling on OPEC to increase production to drive down prices. Still, others foresee global volatility causing demand issues that will drive up prices for the rest of 2018 and beyond.
Investing in companies that are linked to commodities is notoriously volatile. However, for many income investors, the lure of an attractive dividend yield make these stocks a must buy in any portfolio. After several years of declining oil prices, oil companies are enjoying the lift that they are receiving from crude oil prices in the $70-dollar range. But rising prices alone will not make all oil and gas companies a good buy. When oil prices go up, margins get squeezed. That's why you need to consider what a company will do that gives them an advantage. Like Marathon with its ability to refine tough-to-process crude or EOG Resources that focuses its efforts on premium drilling sites.
However, you decide to play oil and gas stocks, remember it's always better to own the company than the sector. While there are many quality ETFs available, they won't offer you the dividend opportunity that many of these stocks provide.
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