HomeMost PopularTech Stocks3 Buy-Rated Energy Stocks Tailored Toward Momentum Investors

3 Buy-Rated Energy Stocks Tailored Toward Momentum Investors

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The Zacks Oils and Energy sector has displayed notable relative strength over the last three months, up nearly 10% and widely outperforming the S&P 500.

Rising energy prices have attracted investors in the space again, particularly following geopolitical concerns and OPEC+ production cuts in 2023. In fact, the sector is currently ranked #1 out of all 16 Zacks sectors, reflecting positive earnings estimate revisions.

Three stocks โ€“ Devon Energy DVN, Diamondback Energy FANG, and EOG Resources EOG โ€“ have all seen positive near-term earnings estimate revisions, indicating optimism among analysts. For those interested in riding recent momentum, letโ€™s take a closer look at each.

EOG Resources

EOG Resources is engaged primarily in the exploration, development, and production of oil and natural gas, with operations spread across the United States. The stock is a Zacks Rank #2 (Buy), with expectations moving higher across the board.

Zacks Investment Research
Image Source: Zacks Investment Research

Income-focused investors could also find EOG shares attractive, currently yielding a solid 2.4% annually paired with a payout ratio sitting at 27% of the companyโ€™s earnings. And the company has shown a notable commitment to increasingly rewarding its shareholders, boasting a 37% five-year annualized dividend growth rate.

In addition, EOG shares recently bounced nicely off their 200-day daily moving average upon a re-test, a level that previously was met with resistance. This positive price action reflects a meaningful change in trend.

Zacks Investment Research
Image Source: Zacks Investment Research

Devon Energy

Devon Energyโ€™s oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. Analysts have raised their expectations, landing the stock into a Zacks Rank #2 (Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

The companyโ€™s growth is forecasted to cool in its current year on hard comps from last year, with expectations alluding to a 30% earnings decline on 20% lower revenues. Still, growth resumes in FY24, with estimates suggesting an 18% uptick in earnings growth on 5% higher sales.

Zacks Investment ResearchImage Source: Zacks Investment Research

Shares are trading below their current 200-day moving average, currently reflecting an unfavorable trend. Investors would likely be better off waiting to see if shares can clear this hurdle and hold, indicating a meaningful change in the long-term trend.

Zacks Investment Research
Image Source: Zacks Investment Research

Diamondback Energy

Diamondbackโ€™s primary operations are focused in the Permian basin, focusing on growth through a pairing of acquisitions and active drilling. Like those above, the stock has enjoyed favorable earnings estimate revisions.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares are now breaking out and heading toward all-time highs, reflecting considerable positive momentum. This favorable price action has been illustrated below.

Zacks Investment Research
Image Source: Zacks Investment Research

Keep an eye out for the companyโ€™s upcoming release expected on November 6th, as the Zacks Consensus EPS Estimate of $4.81 has moved 9% higher over the last several months, reflecting a year-over-year decline of 25% from the year-ago period on hard comps.

Bottom Line

Targeting stocks displaying relative strength can allow investors to inject themselves into positive trends where buyers are in control. And when you add in rising earnings estimate revisions, these stocks have the fuel they need to continue climbing.

For those seeking stocks displaying considerable momentum, all three above โ€“ Devon Energy DVN, Diamondback Energy FANG, and EOG Resources EOG โ€“ deserve a spot on your watchlist.ย 

Zacks Names โ€œSingle Best Pick to Doubleโ€

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

Itโ€™s credited with a โ€œwatershed medical breakthroughโ€ and is developing a bustling pipeline of other projects that could make a world of difference for patients suffering from diseases involving the liver, lungs, and blood. This is a timely investment that you can catch while it emerges from its bear market lows.

It could rival or surpass other recent Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

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Devon Energy Corporation (DVN) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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