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Lithia Springs, FL, United States

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Site: http://news.yahoo.com/energy/

Industry survivors such as Helmerich & Payne and Exxon Mobil have risen as much as 29% in the past two months Eddie Seal/Bloomberg Valero Energy is among two oil refiners on a new list of 15 S&P 500 energy and materials companies with the lowest levels of long-term debt to equity. D MA MB MC MD ME MG ZG ZQ ZR ZS ZT ZU Stocks of oil-related companies with little debt that we listed Jan. 11 have greatly outperformed the S&P 500 Index. With another earnings season behind us, we now have a new list with more recent information that might highlight eventual winners. Tuesday was rough for oil and for oil-related shares, following a strong run for both during the preceding six trading sessions. West Texas crude oil for April delivery (XNYM:CLJ6) sank 4% to $36.50 a barrel. Oil has now fallen 1.5% this year. Euphoria springing from the change in tone among OPEC members and Russia, which were negotiating a freeze on oil production, subsided, at least for a day. Tomi Kilgore summed up the day’s action: “A pullback in crude-oil prices helped cap a historic run-up in the oil sector that was triggered by investors scrambling to close out bearish bets.” The oil industry’s two biggest problems, weak demand and oversupply, are still with us. U.S. shale producers have greatly reduced capital spending, and domestic production will eventually show a large decline. Still, growth of the U.S. economy may help spark demand. But surprisingly weak export figures out of China underline just how premature the oil rally may have been. On Jan. 11 we looked at the 67 companies in the S&P 500 energy and materials sectors (since the commodity decline has been broad), and listed the 10 (all oil-related) with the lowest levels of debt to equity as of Sept. 30. The idea was that those companies could survive a period of weak profits, and be ready to increase capital spending, acquire weaker competitors or scoop up production assets on the cheap before prices eventually rebound, as they always do. Here’s how the companies have performed since Jan. 8, the last trading day before we listed them: Company Ticker Industry Long-term debt/ equity - Sept. 30 Total return - Jan 8. through March 8 Helmerich & Payne Inc. (HP) Contract Drilling 10.9% 29% National Oilwell Varco Inc. (NOV) Oilfield Services/ Equipment 15.3% 5% Exxon Mobil Corp. (XOM) Integrated Oil 16.7% 12% Chevron Inc. (CVX) Integrated Oil 17.9% 9% Occidental Petroleum Corp. (OXY) Oil and Gas Production 19.6% 6% Baker Hughes Inc. (BHI) Oilfield Services/ Equipment 22.2% 6% Hess Corp. (HES) Oil and Gas Production 27.0% 7% Marathon Oil Corp. (MRO) Oil and Gas Production 30.4% -2% Valero Energy Corp. (VLO) Oil Refining/ Marketing 30.9% -8% Pioneer Natural Resources Co. (PXD) Oil and Gas Production 31.1% 8% Source: FactSet Positive returns for eight of 10 stocks over the course of two months would be remarkable for any stock picker. Of course, we didn’t pick them. The data did. And we also pointed out that these were best considered long-term plays. It’s easy to believe that over the next few years, oil prices will recovery significantly. After all, they always have after market disruptions. And despite all the commentary that the age of oil is ending, the great majority of engines continue to be powered by petroleum-based fuels. With another earnings season in the books, we prepared a new list of low-leverage companies in the energy and materials sectors. Two companies, Marathon Oil Corp. (MRO) and Pioneer Natural Resources Co. (PXD), dropped off the list, while Phillips 66 (PSX) and Marin Marietta Materials Inc. (MLM) were added. Rather than leave out any company, we expanded the list. Here are the 15 S&P 500 companies in the energy and materials sectors with the lowest ratios of long-term debt to equity as of Dec. 31: Company Ticker Industry Long-term debt/ equity - Dec. 31 Average return on equity - five years through December 2015 Total return - five years through March 8 Helmerich & Payne Inc. (HP) Contract Drilling 10.9% 14.3% 7% Exxon Mobil Corp. (XOM) Integrated Oil 22.6% 20.5% 13% National Oilwell Varco Inc. (NOV) Oilfield Services/ Equipment 24.0% 8.7% -52% Baker Hughes Inc. (BHI) Oilfield Services/ Equipment 24.8% 4.8% -32% Chevron Inc. (CVX) Integrated Oil 25.3% 14.9% 2% Hess Corp. (HES) Oil and Gas Production 34.2% 5.7% -41% Occidental Petroleum Corp. (OXY) Oil and Gas Production 34.2% 3.4% -20% Valero Energy Corp. (VLO) Oil Refining/ Marketing 35.9% 15.5% 181% Phillips 66 (PSX) Oil Refining/ Marketing 38.5% 18.5% N/A Martin Marietta Materials Inc. (MLM) Construction Materials 39.0% 6.4% 91% Marathon Oil Corp. (MRO) Oil and Gas Production 39.2% 3.9% -63% Mosaic Co. (MOS)   Chemicals: Agricultural 40.5% N/A -61% Pioneer Natural Resources Co. (PXD) Oil and Gas Production 43.7% 3.0% 29% Vulcan Materials Corp. (VMC) Construction Materials 44.5% 1.5% 138% FMC Technologies Inc. (FTI) Oilfield Services/ Equipment 46.0% 25.0% -48% Source: FactSet

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