Shareholders of Southwestern Energy Company (SWN, Financial) and Cameco Corporation (CCJ, Financial) saw the value of their shares increase significantly over the past year, outperforming the S&P 500 Index. The benchmark index for the U.S. market stands at 4,030.61 as of Aug. 29, having lost approximately 10.6% over the past year.
Wall Street sell-side analysts have also issued positive recommendation ratings for these stocks, which indicates their shares prices are expected to continue to improve in the months ahead.
Southwestern Energy Company
Southwestern Energy Company (SWN, Financial) is a leading U.S. oil and natural gas company based in Spring, Texas which produces and markets natural gas and natural gas liquids from large unconventional natural gas and oil fields in Pennsylvania, West Virginia, Ohio and Louisiana. The company owned approximately 768,050 net acres at the end of 2021 and produced fossil fuels from 1,527 wells on reserves of 21.150 trillion cubic feet of natural gas equivalent.
Shares have risen 65.5% over the past year. The stock was trading around $7.53 per share at close on Monday for a market capitalization of $8.39 billion. The stock has an enterprise-value-to-Ebitda ratio of 124.91 versus the industry median of 6.8.
Southwestern Energy Company does not currently pay dividends, having stopped doing so in 2000.
In terms of financial strength, GuruFocus has assigned a score of 4 out of 10 to the company. The Altman Z-Score of 0.17 indicates trouble that could lead to a risk of financial insolvency. However, the interest coverage ratio is strong at 44.44 and compares favorably to the industry median of 10.77.
In terms of profitability, GuruFocus gave the company a score of 7 out of 10, driven by an operating margin of 47.96% versus the industry median of 7.11%.
Looking ahead to 2022, Southwestern Energy Company aims to produce 1.715 to 1.745 trillion cubic feet of natural gas equivalent, up 38.3% to 40.7% from last year's 1.24 trillion. Analysts currently expect natural gas to rise nearly 30% in price this year from the current price of $9.2416 per metric million British Thermal Units.
On Wall Street, the stock has a median recommendation rating of overweight and an average price target of $10.49 per share.
Shares have risen 57.34% over the past year through Aug. 29. The stock closed at $29.14 per share on Monday for a market capitalization of $11.56 billion. The stock has an enterprise-value-to-Ebtida ratio of 41.45 versus the industry median of 4.66.
Cameco Corporation is currently paying quarterly cash dividends, with the next payment scheduled for Dec. 15, when shareholders will receive 12 Canadian cents per common share (or approximately 9.2 cents per common share in U.S. dollars). The payment leads to 0.33% forward dividend yield.
Regarding the financial strength of the company, GuruFocus has assigned a score of 7 out of 10. The Altman Z-score of 4.84 points to solid safety from bankruptcy risk. The interest coverage ratio of 0.44 may indicate that the company could face difficulties in paying the interest charges on its total debt of $1.05 billion.
In terms of profitability, GuruFocus has assigned a score of 5 out of 10 to the company. The company was profitable in only six of the past 10 years.
After increasing its stake in the Cigar Lake Joint Venture, a world-class uranium mine in northern Saskatchewan, to 54.547%, the company now forecasts that it can sell 24 million to 26 million pounds of uranium and between 10.5 million and 11.5 million kilograms of uranium in 2022. It expects to realize a sales price of approximately $56.60 per pound, resulting in projected sales of between $1.73 billion and $1.88 billion. This compares with annual revenue of $1.4 billion in 2021 and $1.8 billion in 2020. Nuclear fuel sales are expected to cost $53.50 to $54.50 per pound and $21.50 to $22.50 per kilogram of uranium. Total costs, including direct administration and exploration costs, will be between $140 million and 150 million, while capital expenditures should absorb approximately $175 million. Due to maintenance and repair work on other company-owned extraction systems, the costs could be slightly higher than forecast.
On Wall Street, the stock has a median recommendation rating of buy and an average price target of approximately $34.28 per share.