4 Energy Stocks for Growth-Oriented Investors

These companies have grown their trailing 12-month net earnings per share significantly

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Aug 19, 2022
Summary
  • Growth-oriented investors looking for bargains could find opportunities in DCP Midstream LP, ConocoPhillips, Phillips 66 and Ovintiv Inc.
  • Wall Street is positive about these companies, and they have grown their earnings significantly.
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Growth-oriented investors may want to consider the following stocks, since they represent businesses with price-earnings ratios below 20 that recorded significant improvements in their trailing 12-month net earnings per share over the past year and are recommended by Wall Street analysts.

DCP MidstreamLP

The first company that qualifies is DCP Midstream LP (

DCP, Financial), a Denver, Colorado-based owner and operator of approximately 35 natural gas processing plants.

Trailing 12-month net income from continuing operations for the quarter ended June 30 was $3.70 per diluted share, an increase of 275% from 77 cents in the prior-year quarter.

The price-earnings ratio was 10.35 (versus the industry median of 9.82) as of Thursday.

Following a 48.26% increase over the past year, the stock traded at $38.40 per share at close on Thursday for a market capitalization of $8 billion and a 52-week range of $23.58 to $39.54.

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Including dividends, DCP Midstream LP outperformed peers such as Plains All American Pipeline (

PAA, Financial) and Shell Midstream Partners (SHLX, Financial), whose shares were up 40.5% and 47.2%, respectively, over the past year.

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On Aug. 12, DCP Midstream LP paid a quarterly cash dividend of 43 cents per common share, an increase of 10.26% year over year, resulting in a trailing 12-month dividend yield of 4.17% and a forward dividend yield of 4.48% as of closing on Thursday.

GuruFocus gave DCP Midstream LP a 5 out of 10 rating for its financial strength and a 6 out of 10 rating for its profitability.

On Wall Street, shares of DCP Midstream LP have a median recommendation rating of buy and an average target price of $44.29 per share.

ConocoPhillips

The second company that makes the cut is ConocoPhillips (

COP, Financial), a Houston, Texas-based fossil fuel company that produces fossil fuels from unconventional deposits in North America and conventional deposits worldwide.

Trailing 12-month net income from continuing operations for the quarter ended June 30 was $12.08 per diluted share, an increase of nearly 690% from $1.53 for the same period ended June 30, 2021.

The price-earnings ratio was 8.66 (versus the industry median of 9.82) as of Thursday.

After a 98.75% increase that occurred over the past year, the stock was trading around $104.88 per share on Thursday for a market capitalization of $133.52 billion and a 52-week range of $51.41 to $124.08.

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Including dividends, ConocoPhillips outperformed its peer EOG Resources Inc. (

EOG, Financial), whose share rose by 98.8% over the past year, but it lagged Occidental Petroleum Corporation (OXY, Financial), whose shares rose by 195.29%.

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On Sept. 1, ConocoPhillips will pay a quarterly cash dividend of 46 cents per common share, which is flat year over year, resulting in a trailing 12-month dividend and forward dividend yield of 1.83% as of closing on Thursday. In addition, the company will provide its shareholders with a variable dividend of $1.40 per common share, which will be paid on Oct. 14.

GuruFocus assigned a score of 7 out of 10 to both ConocoPhillips' financial strength and its profitability.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $124.88 per share.

Phillips 66

The third company that makes the cut is Phillips 66 (

PSX, Financial), an oil and gas company based in Houston, Texas. The operator refines crude oil and other commodities at 12 refineries in the United States and Europe and ships refined products to the market. It deals with storage and transportation. The company also fractionates and markets natural gas and produces chemicals.

Trailing 12-month net earnings from continuing operations for the quarter ended June 30 was $11.92 per diluted share, a positive reversal from the net loss of $3.89 per share for the same period ended June 30, 2021.

The price-earnings ratio is 7.79 (versus the industry median of 9.82) as of Thursday.

Following a 34.48% increase over the past year, the stock was trading around $88.69 per share at close on Thursday for a market capitalization of $42.66 billion and a 52-week range of $63.19 to $111.28.

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Including dividends, Phillips 66 has lagged peers such as Valero Energy Corporation (

VLO, Financial), whose shares were up 106.7% over the past year, and Marathon Petroleum Corporation (MPC, Financial), whose shares were up 91.9%.

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On Sept. 1, Phillips 66 will pay a quarterly cash dividend of 97 cents per common share, up 7.78% year over year and resulting in a trailing 12-month dividend yield of 4.26% and a forward dividend yield of 4.37% as of closing on Thursday.

GuruFocus assigned a score of 7 out of 10 to Phillips 66's financial strength and 7 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $113.39 per share.

Ovintiv Inc.

The fourth company that makes the cut is Ovintiv Inc. (

OVV, Financial), a Denver, Colorado-based producer of oil and natural gas from mineral assets located in North America. It also trades these commodities through its Market Optimization segments.

Trailing 12-month net earnings from continuing operations for the quarter ended June 30 was $9.19 per diluted share, a positive reversal from the net loss of $7.81 for the same period ended June 30, 2021.

The price-earnings ratio is 5.46 (versus the industry median of 9.82) as of Thursday.

Following a 116.95% increase over the past year, the stock was trading around $50.18 per share at close on Thursday for a market capitalization of $12.76 billion and a 52-week range of $21.91 to $63.30.

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Including dividends, Ovintiv Inc. has lagged its closest peer APA Corporation (

APA, Financial), whose shares were up 130.6% over the past year, but it has outperformed another peer, Texas Pacific Land Corporation (TPL, Financial), whose shares were up 38.1%.

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On Sept. 30, Ovintiv Inc. will pay a quarterly cash dividend of 25 cents per common share, up 78.57% year over year, resulting in a trailing 12-month dividend yield of 1.4% and a forward dividend yield of 1.99% as of closing on Thursday.

GuruFocus assigned a score of 5 out of 10 to Ovintiv Inc.’s financial strength and 7 out of 10 to its profitability.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $68.57 per share.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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