Questar Upgraded to Buy - Analyst Blog


On Aug 24, Zacks Investment Research upgraded natural gas-focused energy company, Questar Corp. ( STR ) to a Zacks Rank #2 (Buy).

Why the Upgrade?

After the QEP Resources Inc. ( QEP ) 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 Company.

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 portfolio.

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 days.

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 ( MMP ) and Dril-Quip, Inc. ( DRQ ) - both holding a Zacks Rank #1 (Strong Buy).

DRIL-QUIP INC (DRQ): Free Stock Analysis Report

MAGELLAN MDSTRM (MMP): Free Stock Analysis Report

QEP RESOURCES (QEP): Free Stock Analysis Report

QUESTAR (STR): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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 , Business , Stocks

Referenced Stocks: DRQ , MMP , QEP , STR

More from

Related Videos

Top Home Financing Myths
Top Home Financing Myths            




Most Active by Volume

  • $17.88 ▼ 1.38%
  • $18.51 ▼ 6.98%
  • $94.01 ▼ 1.26%
  • $121.30 ▼ 0.87%
  • $23.28 ▼ 9.17%
  • $14.20 ▼ 0.77%
  • $14.83 ▼ 1.79%
  • $46.70 ▼ 0.38%
As of 7/31/2015, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by