North American natural gas supply is again on the rise. The most significant driver has been continued strong results from the low-cost basins (Marcellus, Montney), which have supported notable upside to volume expectations from both the U.S. Northeast and the Western Canadian basin. Taking this and other factors into account is how the Deutsche Bank A.G (NYSE: DB) energy research team came up with a top 10 list of stocks to buy.
The Deutsche bank team crunched new data on gas drilling and other metrics across various oil and gas subsectors. They are like other Wall Street firms in their outlook for the future. Domestic and international growth equals stable to higher energy prices.
Here are Deutsche Bank’s top oil and gas stocks to buy:
Anadarko Petroleum Corp. (NYSE: APC) is a top name at almost every Wall Street firm. The company engages in the exploration, development, production and marketing of natural gas, crude oil, condensate and natural gas liquids (NGLs) in the United States and internationally. Deutsche Bank has a $107 price target. The Thomson/First Call estimate is at $105. Investors are paid a small 0.4% dividend.
Cobalt International Energy Inc. (NYSE: CIE) is a top new stock at Howard Marks Oaktree Capital, which now holds 133 million shares. Deutsche Bank has a $40 target and the consensus estimate is at $38. A trade up to either target represents a gain of 50% or more.
Cimarex Energy Co. (NYSE: XEC) operates as an independent oil and gas exploration and production company, primarily in Oklahoma, Texas, New Mexico and Kansas. Deutsche Bank has a $99 target while the consensus is much lower at $83.50. A move to the Deutsche Bank target would represent an almost 40% gain. Investors are paid a 0.8% dividend.
EQT Corp. (NYSE: EQT) holds approximately 95,000 acres in this prolific dry gas region of the Marcellus, which includes Greene, Washington and Allegheny Counties in Pennsylvania. As of March 31, 2013, EQT had 109 wells online, with plans to drill 56 wells by year-end. The Deutsche Bank price objective is $110, and the consensus target is much lower at $85. Deutsche Bank’s target is the highest on Wall Street. Investors are paid a 0.2% dividend.
QEP Resources Inc. (NYSE: QEP) is a top stock to buy at Deutsche Bank, and it was also reiterated as an outperform at Raymond James Financial Inc. (NYSE: RJF) this week. Deutsche Bank has placed a $37 price objective on the stock, which is the same as the consensus target.
Concho Resources Inc. (NYSE: CXO) just tendered 75% of their 8.625% senior notes that were due in 2017, cutting interest expense dramatically. Deutsche Bank has a $118 price target while the consensus is lower at $105.
EOG Resources Inc. (NYSE: EOG) is another top name to buy at many Wall Street firms. The company has concentrated on the Eagle Ford shale formation and this seems to be working extremely well as production has skyrocketed. Deutsche Bank has a lofty $155 price target and the consensus is right there with them at $155. Investors receive a 0.6% dividend.
Continental Resources Inc. (NYSE: CLR) engages in the exploration, development and production of crude oil and natural gas properties in the north, south and east regions of the United States. The Deutsche Bank target price is at $105, just north of the consensus $100 level.
Noble Energy Inc. (NYSE: NBL) revenue growth came in higher than the industry average of 8.8%. Since the same quarter one year prior, revenues increased by 4.4%. Deutsche Bank has a $62 target, but the consensus is actually higher at $67.50. Investors are paid a 1% dividend.
Goodrich Petroleum Corp. (NYSE: GDP) wraps up the top oil and gas stocks to buy at Deutsche Bank. This small cap name is also favored by oil industry legend T. Boone Pickens. Deutsche Bank has set a $17 price objective, and the consensus target is at $17 as well.
The Deutsche Bank list of oil and gas stocks to buy offers investors are broad range of companies with solid business models. It is good to remember that they have factored in lower natural gas prices and more supply when choosing the names that have excellent earnings and growth potential.