Macroeconomic volatilities and geopolitical crises hampered the overall economy’s performance last year. However, the performance of the energy sector has been significantly well. Over the past year, the Energy Select Sector SPDR Fund (XLE) has gained 44.9%, whereas the SPDR S&P 500 ETF Trust (SPY) declined 9.6% over the same period.
Furthermore, in its monthly report, the International Energy Agency said that the lifting of COVID-19 restrictions in China could propel global oil demand to its highest on record, surging from its current 100 million b/d to almost 104 million b/d by the end of 2023.
On top of it, hedge fund manager Pierre Andurand anticipates the full reopening of the Chinese economy could send oil prices past $140 per barrel this year.
Given the promising growth prospects of the industry, it might be wise to add fundamentally strong energy stocks APA Corporation (APA – Get Rating) and CVR Energy, Inc. (CVI – Get Rating) to your portfolio before they potentially explode.
APA Corporation (APA – Get Rating)
APA explores, develops, and produces crude oil and gas properties. The company has operations in the United States, Egypt, and the United Kingdom and carries out exploration activities offshore Suriname.
On December 13, 2022, APA’s board of directors declared a regular dividend on the company’s common shares at a rate of 25 cents per share on its common stock, payable to shareholders on February 22, 2023. This reflects its shareholder return ability.
On November 9, APA announced a multi-year partnership with the Clean Cooking Alliance (CCA) to improve health, reduce climate and environmental impacts, and improve overall livelihoods. This reflects the company’s commitment to sustainability.
In the fiscal third quarter that ended September 30, APA’s revenues and other increased 74% year-over-year to $2.87 billion. Adjusted earnings after tax and adjusted EPS came in at $651 million and $1.97, up 75% and 101% from their year-ago values, respectively.
Analysts expect revenue and EPS for the fiscal year that ended December 2022 to come in at $10.57 billion and $8, reflecting 33.3% and 105.2% year-over-year improvements, respectively. Also, it surpassed the consensus revenue estimates in all four trailing quarters, which is impressive.
APA’s stock has gained 39.1% over the past six months. It has gained 4.4% over the past three months to close its last trading session at $45.09.
APA’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
