On Aug 31, Zacks Investment Research upgraded
China Petroleum and Chemical Corporation
) to a Zacks Rank #1 (Strong Buy).
CARRIZO OIL&GAS (CRZO): Free Stock Analysis
OILTANKING PTNR (OILT): Free Stock Analysis
CHINA PETRO&CHM (SNP): Free Stock Analysis
WHITING USA TRS (WHX): Free Stock Analysis
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Why the Upgrade?
China Petroleum and Chemical Corporation (SNP or Sinopec), with
its head office in Beijing, China, is one of the largest
petroleum and petrochemical companies in Asia. The company is the
second largest crude oil and natural gas producer, and the
largest refiner and marketer of refined petroleum products in
China. The company is also the largest producer and distributor
of petrochemicals in the nation.
Supported by outstanding domestic results in oil and gas
exploration, the company posted earnings per share of $1.92 per
ADS in the second quarter of 2013 which jumped 36.2% year over
year. The long-term expected earnings growth rate for the company
Revenues in the first half, improved 5.0% to 1,415.244 billion
yuan from 1,347.85 billion yuan in the prior-year period. During
the six-month period ending Jun 30, 2013, Sinopec's crude oil
production grew 1.4% year over year to 165.4 million barrels,
while natural gas volumes surged 11.8% to 324.1 billion cubic
Domestic crude oil production increased 1.1% year over year to
153.7 million barrels, while overseas volumes increased 5.8% year
over year to 11.8 million barrels. Total oil and gas production
expanded 3.8% to 219.5 million barrels of oil equivalent.
The present valuation also makes the partnership attractive. The
forward P/E multiple of 7.6% is at a discount of 21.6% to the
peer group average of 9.7%. The ROE of the company currently
stands at 12.5%, which is higher than the peer group average of
The Zacks Consensus Estimate for 2013 has risen 9.6% in the last
30 days to $10.02 per ADS, reflecting year-over-year growth of
14.3%. For 2014, the Zacks Consensus Estimate increased 9.3% in
the past 30 days to $11.28 per share, reflecting year-over-year
growth of 12.6%.
Apart from China Petroleum, other operators in the sector having
a favorable Zacks rank are
Carrizo Oil & Gas Inc.
Whiting USA Trust I
Oiltanking Partners, L.P.
). All these stocks presently sport a Zacks Rank #1 (Strong Buy).