Shares of Marathon Oil (MRO) have gained substantially so far this year. The company outpaced Wall Street’s earnings estimates in its last reported quarter, which has attracted investors’ attention. However, considering its high volatility, is MRO a good energy stock to add to one’s portfolio now? Read on to find out.Marathon Oil Corporation (NYSE:MRO) is a Houston, Tex.-based independent exploration and production company that is engaged primarily in exploring, producing, and marketing crude oil and condensate, natural gas liquids, and natural gas and natural gas products. It also owns and operates gathering and treating facilities. The stock has gained 297.9% in price over the past year and 155.9% year-to-date to close its last trading session at $17.07. In addition, shares of MRO are trading well above their 50-day and 200-day moving averages, indicating an uptrend. However, it has a 3.08 beta, which indicates that the stock is more volatile than the broader market.
MRO delivered a robust third-quarter earnings report, outpacing the consensus earnings estimate. Its total revenues and other income increased 92.7% year-over-year to $1.45 billion in its fiscal third quarter, ended September 30. Its adjusted net income was $310 million compared to a year-ago loss. The company’s adjusted EPS increased 239.3% year-over-year to $0.39, beating the $0.31 consensus EPS estimate by 25.8%.
Favorable industry trends, with rallying oil and natural gas prices and a sharp rise in demand, have helped the company register significant gains and recover from last year’s losses. Gas prices have surged to a seven-year high of $3.40 per gallon nationally, while Bank of America (NYSE:BAC) expects Brent crude oil to hit $120 per barrel by June 2022, marking a 45% increase over current levels. The rising prices should bode well for oil-producing companies.