4 Reasons To Add Anadarko Petroleum (APC) To Your Portfolio

Estimates for Anadarko Petroleum Corporation (NYSE:APC) have been revised upward over the past 30 days, reflecting analysts’ confidence in the stock post solid first-quarter 2018 results. The Zacks Consensus Estimate for 2018 and 2019 earnings have moved up 29% and 41.4% to $2.54 and $2.97, respectively.

Shares of Anadarko Petroleum have gained 35.3% in the last 12 months compared with the Zacks Oil & Gas E&P Industry’s rally of 12%. The company is one of the largest independent oil and natural gas exploration and production companies. It has proved reserves of 1.44 Billion Barrels of Oil Equivalents at 2017-end. Anadarko Petroleum sports a Zacks Rank #1 (Strong Buy).

The stock carries an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.

Let’s focus on the factors that make Anadarko Petroleum a profitable bet.

Earnings Result: Anadarko Petroleum delivered earnings of 52 cents per share in first-quarter 2018 results, which beat the Zacks Consensus Estimate of 43 cents by 20.9%.

Positive Earnings Surprise History: Anadarko Petroleum has an impressive earnings surprise history. Earnings surpassed the Zacks Consensus Estimate in the last six months, with the average being 260.5%. The consecutive estimate beats reflect the company’s operational excellence.

Shifting Focus: Anadarko Petroleum is strategically shifting its focus toward the liquid-rich regions. This resulted in higher production, increased sales volume and improved margin. To maintain focus on high-return domestic assets and achieve capital efficiency, the company has been selling non-core properties since 2004.

Dividend Hike & Share Buyback Strategy: Anadarko Petroleum’s board of directors have approved to raise quarterly dividend by 400% to 25 cents. Moreover, the board has authorized $500 million for share buyback. To raise the value of the investors, total repurchase program will amount to $3 billion. In the first quarter, the company utilized $1.9 billion from the program to repurchase shares.

Other Stocks to Consider

A few other top-ranked stocks from the same space are BP plc (NYSE:BP) , Bonanza Creek Energy, Inc. (NYSE:BCEI) and Wildhorse Resource Development Corporation (NYSE:WRD) . All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

BP pulled off a positive earnings surprise of 16.42% in the last quarter. The Zacks Consensus Estimate for 2018 EPS moved up 11% in the last 30 days.

Bonanza Creek Energy had a positive earnings surprise of 50.70% in the last quarter. The Zacks Consensus Estimate for 2018 EPS moved up 10% in the last 30 days.

Wildhorse Resource pulled off a positive earnings surprise of 32.35% in the last quarter. The Zacks Consensus Estimate for 2018 EPS moved up 12% in the last 30 days.

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