While several major economies are now reopening, the stock market is far stable. Last week, the Federal Reserve signaled that it would hold benchmark interest rates near zero for now, but the central bank forecasts two rate hikes by the end of 2023. This indicates the Fed’s concerns over inflation. Indeed, the central bank has raised its inflation projections for 2021 to 3.4% from its 2.4% prior estimate…
Consequently, the stock market is expected to remain volatile. Against this backdrop, stocks that have gained momentum lately could be appropriate bets because their momentum is expected to continue irrespective of market volatility. Investors’ interest in the momentum stocks is evident in the iShares MSCI USA Momentum Factor ETF’s (MTUM) and the Invesco DWA Momentum ETF’s (PDP) 3% and 4.6% gains, respectively, over the past month. This compares to the SPDR S&P 500 Trust ETF’s (SPY) 1.9% returns.
EOG Resources, Inc. (EOG – Get Rating), Canadian Natural Resources Limited (CNQ – Get Rating), and Generac Holdings Inc. (GNRC – Get Rating) have generated solid momentum and we think that their fundamental strength should help them to continue rallying, dodging the market’s volatility. So, it would be wise to bet on them now.
EOG Resources, Inc. (EOG – Get Rating)
As one of the largest crude oil and natural gas exploration and production companies in the United States, EOG explores for, develops, produces and markets crude oil and natural gas. The Houston, Tex.,company has proved reserves in the United States, Trinidad, and China.
EOG’s total revenue came in at $3.69 billion for the first quarter, ended March 31, 2021, which represents a 24.6% sequential rise. Its non-GAAP net income increased 197.5% year-over-year to $946 million. Its non-GAAP EPS came in at $1.62, up 194.5% year-over-year. The company’s net debt was reduced by 24.6% year-over-year to $1.75 billion.
For the current quarter, ending June 30, 2021, analysts expect EOG’s EPS and revenue to increase 708.7% and 249.1%, respectively, year-over-year to $1.40 and $3.85 billion. Moreover, the company surpassed consensus EPS estimates in three of the trailing four quarters.
EOG has declared a $0.41 per share regular dividend and a special dividend of $1.00 per share, both payable on July 30, 2021. EOG CEO William R. Thomas said, “Our outstanding first quarter results and special dividend announcement reflect the power of EOG’s returns-focused strategy.”
The stock has gained 71.1% over the past six months and 23% over the past three months to close yesterday’s trading session at $85.70. It is currently trading above its $82.86 and $68.32 50-day and 200-day respective moving averages, indicating an uptrend.
It’s no surprise that EOG has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting. The stock has an A grade for Momentum, and a B grade for Quality, Growth, and Sentiment. Click here to see EOG’s ratings for Value and Stability also.
EOG is ranked #18 of 95 stocks in the Energy- Oil & Gas industry.
Canadian Natural Resources Limited (CNQ – Get Rating)
Crude oil and natural gas exploration, development and production company CNQ operates through three geographic segments: North America, North Sea and Offshore Africa. The Calgary, Canada company’s offerings include synthetic crude oil (SCO), light and medium crude oil, bitumen (thermal oil), primary heavy crude oil, and Pelican Lake heavy crude oil.
For the first quarter, ended March 31, 2021, CNQ’s revenue increased 46.8% year-over-year to CAD 6.61 billion ($5.37 billion). The company’s net earnings came in at CAD 1.38 billion ($1.12 billion) compared to a CAD 1.28 billion ($1.04 billion) loss in the prior-year quarter. Its EPS was CAD 1.16 ($0.94) compared to a CAD 1.08 ($0.88) loss per share in the year-ago period.
Analysts expect CNQ’s annual revenue to…
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