Hess (HES) is an energy company, placed on a global platform for the exploration and production of oil and natural gas. The market share of Hess Corporation is trading at around $63, depicting an upward trend in moving towards its 52-week high of $87.40. The company has market capitalization of $8.08 million, with earnings per share at $5.01 and price earnings of $12.10. At its current market price, Hess Corporation is trading at around 10 times its past earnings, and at approximately 8 times its forward earnings. In my opinion the stock is still available at a discount, considering its current market rate and also its contemporaries like Exxon trading at much higher multiples. From the perspective of an expected boom in the oil & gas sector, the 2012 earnings per share of Hess Corporation is expected to rise by 17%. Also considering a slightly pessimistic scenario, where the earnings per share of Hess Corporation falls to multiples of around 8, the market price of Hess Corporation would still increase by around 12%. I would certainly recommend buying this stock at its current market share, with a fairly long term perspective.
Exxon Mobil (XOM) is a global player in the oil and gas sector, in carrying out activities pertaining to natural gas. The stock is currently trading at around $83, closer to its 52 week highs of $88.23. Having market capitalization of $401.67 billion, the company has earnings per share of around $67.03, while its price earnings ratio is approximately $10.10. In my opinion, Exxon Mobil Corporation is an undervalued stock. Considering its performance, depicting a return of around 120% over the last decade which excludes its dividend payout, coupled with a growth of approximately 555%, I would consider the stock to be optimal to be purchased at its current market price. The book value of Exxon Mobil Corporation, in the last decade, has increased by around 123%. Currently, the company has a free cash flow of around $7.40 billion. Moreover, the company's revenues have rise by around 180%, from its last decade. As Exxon Mobil Corporation also depicts a strong history of dividend payouts coupled with a tendency to buy back stocks, I would consider this company stock to be purchased at its current levels, with a long-term horizon.
Noble Energy (NBL) is an independent company engaged in the energy sector. The current market price of Noble Energy is around $101, closer to its 52 week highs. With an price to earnings ratio of around $23.60, the company's market capitalization is marked to around $17.87 billion. In my opinion, Noble Energy, Inc. has a good growth potential in 2012, having its current market price reflecting the earnings per share concerns of its investors. However, this large cap stock is greatly undervalued which should be purchased at its current market price. Currently trading at a mere 2% below its 52-week high, the stock has depicted an increase of around 2.18% in the past one month of its trade. An upward trend in the stock has seemingly initiated, wherein I expect its earnings per share to further increase. In a nutshell, Noble Energy, Inc. should be bought at its current market price, with a long term perspective.
Murphy Oil (MUR) is a global company in the oil & gas sector, having operations in the U.S. and the U.K., pertaining to oil exploration, production, refining and marketing activities. The company's current stock price is $60, trading between 52-week highs and lows of $78.16 and $40.41 respectively. With earnings per share of $4.49 and price to earnings of $13.50, Murphy Oil Corporation has a market capitalization of around $11.7 billion. The company has a strong payout ratio at around 20.67%, with 1.78% depicting its dividend yield. The current market price of Murphy Oil Corporation is approximately 5.60% above its 200 day simple moving average, and around 11% and 5.50% above its 50 and 20-day simple moving average respectively. The company has around $46 book value per share, whereas $5.97 depicts its trailing twelve months diluted earnings per share. At its current market price, the company is still undervalued. The stock has a potential uptrend expected in 2012. With a positive outlook for the oil & gas sector in 2012, I would certainly recommend to purchase this stock at its current market price, as a long-term investment.
Dominion Resources (D) aggressively engages in the energy sector, as one of its largest transporter and exporter in the U.S. The stock is currently at around $49, seemingly moving towards its 52-week high of $53.68. At a price earnings ratio of $19, and earnings per share of around $2.62, the company portrays a healthy dividend yield of around 4.22%. The company certainly appears to be undervalued at its current market price. However, there are certain parameters one ought to consider before investing in this stock. The stock depicts a beta of around 0.5, while trading at around 14 times its forward earnings. Secondly, the company suffers from the current and expected rise in energy prices, and also from lower capacity utilization. In my opinion, despite a good dividend yield, it is not advisable to purchase the stock at its current market price. The stock thus has to be avoided for purchase.
About the author:I'm mostly interested in income investing using dividends, preferred stocks and other debt instruments, and pair trading.
I fundamentally analyze every business from the top down.
In my personal life, I have a strong Jewish faith and enjoy playing Scrabble and entrepreneurship.