Cabot Oil & Gas Corporation (COG): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


Cabot Oil & Gas was one of the better performing S&P stocks of 2013, gaining around 50% for the year. Most of the gain can be attributed to its exposure to the high-return Marcellus and Eagle Ford Shale plays, as well as its above-average production growth. A relatively low risk profile and longer reserve lives are other positives in the Cabot story. But given natural gas' volatile fundamentals and Cabot's high exposure to the commodity, we do not believe that the stock can sustain the momentum in the near future. Cabot's steep valuation and miniscule payout also keep us worried. Considering these factors, we are maintaining our Neutral recommendation on the company's shares.


Cabot Oil and Gas (COG), based in Houston, Texas, is an independent oil and gas exploration company with producing properties mainly in the U.S. Founded over 100 years ago in Pennsylvania, Cabot originally operated in the Appalachian Mountains of the eastern U.S. before moving the bulk of its activities to the Gulf Coast. Today, the company has four domestic focus areas: the Appalachia, east and south Texas, and Oklahoma. As of year-end 2013, the company had 5.45 trillion cubic feet equivalent (Tcfe) in proved reserves (97% natural gas). Cabot's output totaled 413.6 billion cubic feet equivalent (Bcfe) in 2013, of which more than 95% was natural gas.

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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 The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: COG

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