On Aug 24, Zacks Investment Research upgraded natural
gas-focused energy company,
) to a Zacks Rank #2 (Buy).
Why the Upgrade?
QEP Resources Inc.
) spin-off, Questar transformed itself into a natural gas-focused
energy company, which explores natural gas resources and serves
customers domestically and worldwide. It has three principal
subsidiaries - Wexpro Company, Questar Pipeline and Questar Gas
On Jul 31, the Utah-based firm reported second quarter earnings
of 22 cents - in line with the Zacks Consensus Estimate - on the
back of improvements in its 'Questar Gas' and 'Wexpro' segments,
which were offset by weak 'Questar Pipeline' results. Total
revenue of $195.6 million was up 3.8% from the year-ago level.
Last month, Questar subsidiary, Wexpro, announced the acquisition
of additional working interest in natural gas producing
properties for a consideration of $106.4 million. The acquisition
is expected to add value to the company's assets and enhance its
The company's dividend story also looks promising. Last quarter,
it paid a dividend of 18 cents, reflecting a 6% hike. This marked
the company's 41st dividend increase in as many years. Questar
has also announced a dividend of 18 cents for the next quarter as
well, making it the company's 275th consecutive dividend payment.
Moreover, the company displays industry leading return on equity
(ROE) figures and has one of the best credit ratings in the
utility sector, thus enjoying a competitive edge over its peers.
All these positives are reflected in the company's long-term
expected earnings growth rate of 5.07%. The Zacks Consensus
Estimate for the third quarter as well as for 2013 has moved up
by a penny to 18 cents and $1.19, respectively over the last 60
Other Stocks to Consider
In addition to Questar, there are certain other firms in the
energy sector that are expected to perform even better over the
next one to three months. These include
Magellan Midstream Partners LP
) - both holding a Zacks Rank #1 (Strong Buy).
DRIL-QUIP INC (DRQ): Free Stock Analysis
MAGELLAN MDSTRM (MMP): Free Stock Analysis
QEP RESOURCES (QEP): Free Stock Analysis
QUESTAR (STR): Free Stock Analysis Report
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