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The outlook for the oil industry looks positive, with rising oil demand, geopolitical tensions and expectations for supply cuts that will drive oil prices higher. Against this backdrop, the April returns of high-quality oil stocks BP plc (BP), Petroleo Brasileiro SA-Petrobras (PBR), and Cheniere Energy Partners LP (CQP) may be of interest. be. read….
The oil industry is showing positive signs and is expected to grow significantly in the short term due to the increasing demand for oil and the introduction of advanced technologies in transportation, manufacturing and other industrial activities. Therefore, investors may focus on BP’s fundamentally strong oil stock (blood pressure), Petroleo Brasileiro SA – Petrobras (PBR), and Cheniere Energy Partners, LP (CQP) for April returns.
OPEC project global oil demand It is expected to grow by 2.2 million barrels per day in 2024 and 1.8 million barrels per year next year. Brent Futures and US WTI Futures Contracts Rise Recently This includes OPEC+ production cuts, Ukrainian drone attacks on Russian refineries, retaliatory attacks on Ukrainian oil facilities, and potential supply shortages during the peak summer driving season caused by tensions in the Middle East. This is due to growing concerns.
Bank of America energy analysts have raised their Brent price forecasts for this year: $86 per barrel on average And this summer it peaked at $95 a barrel. We expect WTI to reach $81 per barrel.
The oil and gas market is predicted to be reaching $9.35 trillion It will grow at a CAGR of 5.2% by 2028, driven by resource exploration, government initiatives, and investments in developing countries.
Additionally, oil companies are beginning to integrate advanced technologies such as: Artificial intelligence (AI) and utilize them in exploration and output processes to reduce costs and enhance operations. This digital implementation will transform the industry and enable smarter and more efficient decision-making, contributing significantly to the growth of the oil sector.
To that end, let’s take a look at the fundamentals of three stocks to watch in the oil industry.
BP plc (blood pressure)
Headquartered in London, UK, BP provides carbon products and services. The company operates through gas and low carbon energy. Oil production and operations. Customer and product segments.
On March 11, BP announced that it was in the early stages of its previously announced cash tender offer to purchase in cash up to $1.3 billion in aggregate principal amount of notes issued by its wholly-owned subsidiary BP Capital Markets plc. The bidding results were announced. Offeror.
annualized dividend $1.74 per share equates to a dividend yield of 4.51% at the current stock price. The four-year average yield is 5.79%. Over the past three years, BP’s dividend has grown at a CAGR of 2.7%.
BP’s trailing twelve month operating cash of $32.04 billion is significantly higher than the industry average of $667.91 million. ROCE and ROTC for the past 12 months were 22.12% and 11.53%, which are 26% and 39% higher than the industry average of 17.56% and 8.29%, respectively.
For the fourth quarter of the fiscal year ended December 31, 2023, BP’s total revenue and other income, and earnings before interest and taxes, were $52.59 billion and $2.08 billion, respectively. In addition, adjusted EBITDA was $10.57 billion.
For the quarter, net income attributable to BP stockholders and net income attributable to BP stockholders per ADS were $371 million and $0.13, respectively.
Street expects BP’s revenue to rise slightly year-on-year to $56.43 billion in the first quarter of its fiscal year ending March 2024. EPS for the quarter is expected to be $1.05.
Shares have increased 9.5% over the past nine months, closing the last trade at $38.66. It has risen 8% in the past month.
blood pressure power rating reflects that positive outlook. The stock has an overall rating of B, which equates to a “buy” according to our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to the best degree.
BP has a B grade for value, momentum, and quality. Within A rating Foreign oil and gas It ranks 16th out of 40 stocks in the industry.
To see additional POWR Ratings for BP Growth, Stability, and Sentiment, visit click here.
Petroleo Brasileiro SA – Petrobras (PBR)
Headquartered in Rio de Janeiro, Brazil, PBR explores, produces and sells oil and gas in Brazil and abroad. The company operates through exploration and production. Refining, transportation and marketing. Gas and Power Segment.
The annual dividend is $2.94 per share, which translates to a dividend yield of 19.66% at the current stock price. The average yield over four years is 22.70%. Over the past three years, PBR’s dividend has grown at a he CAGR of 54.7%.
PBR’s operating cash for the trailing twelve months was $44.46 billion, significantly higher than the industry average of $667.91 million. Trailing 12-month net income and leveraged FCF margin of 24.34% and 28.41% are 86.7% and 344.9% higher than the industry average of 13.04% and 6.39%, respectively.
For the fourth quarter of its fiscal year ended December 31, 2023, PBR’s sales revenue was $27.11 billion, and gross profit increased slightly from the prior year period to $14.65 billion. In addition, adjusted EBITDA was $13.47 billion.
Net income attributable to PBR shareholders and net cash provided by operating activities for the quarter were $6.26 billion and $11.67 billion, respectively.
Street expects PBR’s revenue and EPS to be $25.33 billion and $0.91, respectively, for the fiscal first quarter ending March 2024. The company has exceeded consensus EPS estimates in three of his four subsequent quarters, which is great.
The stock has increased 48.6% over the past year, closing at $15.49. It has risen 13.9% over the past nine months.
PBR’s POWR Ratings reflect this promising outlook. The overall rating is B, which is equivalent to a “buy” according to our own rating system.
PBR has an A grade for quality and a B grade for momentum. It is ranked 10th within the foreign oil and gas industry.
For other PBR ratings (growth, value, stability, sentiment), please see click here.
Cheniere Energy Partners, LP (CQP)
CQP provides liquefied natural gas (LNG) to integrated energy companies, utilities and energy trading companies around the world. The company owns and operates a natural gas liquefaction and export facility located at the Sabine Pass LNG production terminal.
On February 7, CQP distributed cash to unitholders of $1.04 per common unit, consisting of $0.78 base and $0.26 variable, and related distributions to the general partner. The annual dividend is $4.13 per share, which translates to a dividend yield of 8.40% at the current stock price. The average yield over four years is 2.03%.
CQP’s trailing twelve month operating cash was $3.11 billion, which was 365.5% higher than the industry average of $667.91 million. Over the past 12 months, ROTC and ROTA were 21.41% and 23.50%, which are 158.2% and 251.9% higher than the industry average of 8.29% and 6.68%, respectively.
CQP’s total revenue and operating income for the fourth quarter of the fiscal year ended December 31, 2023 were $2.69 billion and $1.1 billion, respectively. In addition, adjusted EBITDA was $1.05 billion. Net income, basic net income per common unit and adjusted net income for the quarter were $906 million and $1.42, respectively.
Street expects CQP’s revenue and EPS to be $2.21 billion and $1.09, respectively, for the fiscal first quarter ending March 2024.
Shares have increased 4.1% over the past year, closing at $48.42.
CQP’s solid outlook is reflected in its POWR Rating. The stock has an overall rating of B, which equates to a “buy” according to our proprietary rating system.
CQP has a B rating for Momentum, Sentiment, and Quality. Ranked 10th out of 24 stocks within the A rating. MLP – Oil and Gas industry.
click here Click here for additional POWR Ratings for CQP (Growth, Value, Stability).
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BP stock fell $0.02 (-0.05%) in pre-market trading on Monday. Year-to-date, BP has gained 10.54%, while the benchmark S&P 500 index has gained 9.41% during the same period.
About the author: Neha Panjwani
Neha has had a deep interest in finance since her school days, a passion that led her to a career as an investment analyst after completing a bachelor’s degree in commerce. Neha is currently enrolled in the CFA program and is dedicated to further deepening her understanding of the fundamentals of investing. Neha’s main objective is to help individual investors identify the best investment opportunities by passionately evaluating key aspects of financial products, primarily focusing on stocks and her ETFs. is. Her focus is on empowering individuals to make informed and strategic investment decisions in a dynamic financial world.
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