8 Top Oil and Gas Stocks That Analysts Think Have Bottomed Out

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Enterprise Products Partners

This is one of leading North American providers of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) provides a wide variety of midstream energy services, including gathering, processing, transportation and storage of natural gas, NGLs fractionation, import and export terminaling, and offshore production platform services.

One reason why many analysts may like the stock might be its distribution coverage ratio. That ratio is well above one-times, making it relatively less risky in its sector. The company’s distributions have grown for several quarters, and last year Enterprise Products announced that the board of directors of its general partner declared an increase in the quarterly cash distribution paid to partners to $0.4225 per common unit, or $1.70 on an annualized basis.

Investors receive a 6.75% distribution. The $34 RBC price target compares with the consensus target of $31.48. Shares closed Tuesday at $25.19.

Exxon

This remains a top Wall Street energy pick, despite being down over 15% in the past month, and it was just added to the Merrill Lynch US 1 list. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.

The company also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

For 75 years in a row, Exxon has raised its dividend on a split-adjusted basis. Thanks to the company’s vertically integrated model in the oil and gas business, its profitability doesn’t suffer through commodity price swings like a company that’s a pure play in one segment of the value chain.

Shareholders receive a 4.0% dividend. Merrill Lynch has set its price objective at $100. The consensus estimate is $85.98, and shares closed Tuesday at $77.07.

Halliburton

This stock is still down over 20% from highs printed in January and remains a top large-cap oil services pick on Wall Street. Halliburton Co. (NYSE: HAL) is one of the world’s largest providers of products and services to the energy industry. It serves the upstream oil and gas industry throughout the life cycle of the reservoir, from locating hydrocarbons and managing geological data to drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field.

Halliburton is the second-largest provider of oil services and the number one player in pressure pumping services worldwide. For investors looking for an oilfield services company to add, this is arguably the best, and analysts feel it will be a huge benefactor as the frac market has tightened significantly and prices are 20% to 30% off the lows.

The company posted solid fourth-quarter results that topped analysts’ estimates, driven by better pricing and increased activity in every reporting region. Earnings per share beat the highest consensus estimates on robust review, with particular strength internationally.

Shareholders receive a 1.47% dividend. The RBC price target is a whopping $65. The consensus target is $63.19, and shares closed at $48.82.

MPLX

This company reported very solid numbers but may be more off the radar for some investors. MPLX L.P. (NASDAQ: MPLX) is a diversified, growth-oriented MLP formed in 2012 by Marathon Petroleum to own, operate, develop and acquire midstream energy infrastructure assets. It is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation and storage of crude oil and refined petroleum products.

Despite the issues from the recent Federal Energy Regulatory Committee ruling, the company posted strong fourth-quarter results and announced capital expenditures for 2018 would be right at $2.2 billion, above Wall Street estimates.

MPLX unitholders receive 7.42% distribution. The $44 RBC target price is above the $42.06 consensus target. Shares closed at $32.76.