On Apr 9, 2013, shares of
Noble Energy Inc.
) hit a 52-week high of $117.70. Noble Energy registered positive
earnings surprises in eight of the last ten quarters, with an
average beat of 15.56%.
In 4Q12, the company reported strong results, with earnings of
$1.65 per share increasing 6.4% from the 4Q11 level. Total
revenue of $1.16 billion surpassed the year-ago figure of $0.9
billion by 30.1%. The year-over-year rise in revenue was
attributable to a superior performance from the crude oil and
The company continues to make strategic investment to strengthen
its position in the global market. After beginning operation in
Aseng, offshore Equatorial Guinea in 2011 and Galapagos, in the
deepwater Gulf of Mexico in 2012, the company successfully
started operation in Tamar natural gas field offshore Israel in
Apr 2013. The company is scheduled to begin operation in Alen,
offshore Equatorial Guinea in the third quarter of 2013.
In addition, new exploration opportunities in Nevada, the
Falklands and Sierra Leone and $1 billion generated from
divestiture of non-core assets will enable the company to
concentrate more on its core operations.
All these activities will strengthen Noble Energy's competitive
position and boost its financials. Noble Energy projects 2013
sales volume in the range 270 thousand barrels oil equivalent per
day (MBoe/d) to 282 MBoe/d, up from 239 MBoe/d sold in 2012.
We expect long-term earnings growth of 8.9% on the back of a
4.15% top-line increase. The Zacks Consensus Estimate for 2013 is
$6.39 reflecting year-over-year growth of 29.02%.
The present valuation also makes the company attractive. Shares
of American Water Works Company currently trade at 18.33x
12-month forward earnings, a 9.9% discount to the peer group
average of 20.34x. In addition, ROE of the company is 11.7%,
higher than the peer group average of 7%.
The company has consistently paid dividends to its shareholders
and repurchased shares to enhance shareholder value. Noble Energy
disbursed $168 million as dividend and repurchased shares worth
$13 million in 2012. The quarterly dividend rate was raised to 25
cents from 22 cents in Oct 2012
Noble Energy currently carries a Zacks Rank #3 (Buy). Other
independent oil and gas companies like
EPL Oil & Gas Inc.
Range Resources Corporation
Stone Energy Corp.
) look better positioned with a Zacks Rank #1( Strong Buy).
Based in Houston, Texas, Noble Energy was founded in 1932. It
operates internationally and engages in the acquisition,
exploration, development, production, and marketing of crude oil,
natural gas and natural gas liquids.
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