5 Stocks To Buy As U.S. Natural Gas Booms

The U.S. Energy Information Administration is officially predicting continued development of U.S. shale, along with increased liquid and natural gas production, through 2042.

The new prediction comes in the EIA’s “Annual Energy Outlook” report. The agency notes that almost all “new electricity generation capacity” will be “fueled by natural gas and renewables after 2022.”

The 2018 EIA report also projects that technological advancements and greater energy efficiencies will lead the U.S. to become a net energy exporter for the first time since the early 1950s. The EIA expects the U.S. will reach that milestone by 2022—years sooner than originally projected.

With that said, let’s take a look at five companies that run U.S. natural gas businesses that are set to capitalize on its continued growth and importance both domestically and abroad.

1. Centennial Resource Development, Inc. (NASDAQ:CDEV)

This Denver, Colorado-headquartered independent oil and natural gas company focuses on the development of unconventional oil and natural gas reserves in the booming Permian Basin area. Centennial is currently a Zacks Rank #2 (Buy) and sports an “A” grade for Growth in our Style Scores system.

The company has also recently seen analysts up their fiscal 2018 earnings estimates, and now our current Zacks Consensus Estimate calls for the company’s EPS figure to skyrocket 170% to $0.75 next year. Looking even further down the road, Centennial is expected to expand its EPS figures at an annualized rate of a whopping 47.01% over the next three to five years.

2. Cabot Oil & Gas Corporation (NYSE:COG)

This Houston-based company is engaged in the development, exploitation, and exploration of oil and gas exclusively in the continental U.S. COG is currently a Zacks Rank #1 (Strong Buy) and boasts “A” grades for both Growth and Momentum.

Cabot is expected to expand its EPS figures at an annualized rate of 30% over the next three to five years as demand for natural gas climbs. What’s more, the company is projected to see its earnings hit $1.10 per share in fiscal 2018, which would mark an impressive 115% year-over-year jump from 2017’s projected total.

3. Marathon Petroleum Corporation (NYSE:MPC)

The second-largest U.S. refiner based on crude oil refining capacity is also heavily invested in natural gas after a $15.6 billion acquisition in 2015. Marathon is currently a Zacks Rank #1 (Strong Buy) and rocks an “A” VGM grade, supported by “A” grades for Value and Growth in our Style Scores system.

Marathon has seen its earnings estimate revisions climb for fiscal 2018 recently, with the oil and gas giant also expected to expand its bottom-line by 34% from 2017’s projected total, based on our current estimates. On top of that, Marathon projected to expand its EPS figures at an annualized rate of 14.24% over the next three to five years.

4. RSP Permian, Inc. (NYSE:RSPP)

This Dallas, Texas-headquartered independent oil and natural gas firm works in the same thriving area of West Texas as many other companies. RSP is currently a Zacks Rank #1 (Strong Buy) and earns “B” grades for both Growth and Momentum. Furthermore, within the last 60-days, the company has earned over a dozen upward earnings estimate revisions for fiscal 2018.

Our current Zacks Consensus Estimates call for the company’s 2018 EPS figures to skyrocket 153% next year. RSP’s 2018 sales are projected to hit $1.22 billion, which would mark a 50% jump from 2017’s estimated total. Investors should also note that the Dallas-based company is projected to see its earnings grow at an annualized rate of more than 33% over the next three to five years.

5. WildHorse Resource Development Corporation (NYSE:WRD)

WildHorse is based in Houston, Texas and is currently a Zacks Rank #1 (Strong Buy). This company is also in the business of producing oil as well as natural gas and liquefied natural gas, with primary operations in East Texas and North Louisiana. Recently, the company has seen its 2018 earnings estimates climb.

On the back of these upward earnings revisions, WildHorse is now projected to see its fiscal 2018 earnings jump 200% from 2017’s projected total. The company is also expected to expand its EPS figures at an annualized rate of 44% over the next three to five years.

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