The Best Value in Energy Stocks for the Rest of 2013 (XOM, CVX, BP, CHK, EOG, SLB, HAL, BHI, NOV, RIG, ESV, VLO, PSX, MPC)

Drilling RigIn the energy sector, 2012 was the year of the refiner. Stock prices appreciated at least 80% for most of them, while the supermajor integrated companies were only able to tally gains in the single digits. Services firms managed to eke out share price gains in the teens over the past 12 months. Of the natural gas producers, the less said the better.

Here is a look at some of the major stocks in each sector and what could be in store for them in 2013.

Integrated Oil and Gas Companies

Exxon Mobil Corp. (NYSE: XOM) trades near $87.95 and has a market value of about $395.32 billion. The consensus target price from Thomson Reuters is $94.10, and the 52-week range is $77.13 to $93.67. Exxon has a dividend yield of 2.5%. The implied upside to the consensus target is 7%, and note that the target price is slightly above the 52-week high.

Chevron Corp. (NYSE: CVX) trades near $114.83 and has a market value of about $224.41 billion. The consensus target price is $123.90, and the 52-week range is $95.73 to $118.53. Chevron has a dividend yield of 3.1%. The implied upside to the consensus target is 8%, and again the target price is above the 52-week high.

BP PLC (NYSE: BP) trades near $43.19 and has a market value of about $137.1 billion. The consensus target price is $51.25, and the 52-week range is $36.25 to $48.34. BP has a dividend yield of 4.9%. The implied upside to the consensus target is 19%, and again the target price is above the 52-week high.

As a value play, only BP looks like a possibility. The problem of course is the remaining liability the company faces for the April 2010 Gulf of Mexico explosion that killed 11 workers and spilled 5 million barrels of crude into the Gulf waters. Production at the majors was at best flat last year and they are expecting better this year. If that happens, these companies may perform better this year, but only if the spread between Brent crude and WTI continues to narrow, and to close on the higher Brent price.

Natural Gas Producers

Chesapeake Energy Corp. (NYSE: CHK) trades near $20.37 and has a market value of about $13.13 billion. The consensus target price is $22.90, and the 52-week range is $13.32 to $26.09. Chesapeake has a dividend yield of 1.7%. The implied upside to the consensus target is 12%, and again the target price is above the 52-week high.

EOG Resources Inc. (NYSE: EOG) trades near $129.78 and has a market value of about $35.11 billion. The consensus target price from Thomson Reuters is $137.05, and the 52-week range is $82.48 to $129.92. EOG has a dividend yield of 0.5%. The implied upside to the consensus target is 6%, and again the target price is above the 52-week high.

EOG's shares rose 19% last year, while Chesapeake's lost more than 9%. The market for natural gas remains oversupplied, continuing to put pressure on prices. That pressure will not dissipate much this year.

Oil Field Services

Schlumberger Ltd. (NYSE: SLB) trades near $78.15 and has a market value of about $103.72 billion. The consensus target price is $90.80, and the 52-week range is $59.12 to $80.78. Schlumberger has a dividend yield of 1.6%. The implied upside to the consensus target is 16%, and again the target price is well above the 52-week high.

Halliburton Co. (NYSE: HAL) trades near $40.53 and has a market value of about $37.6 billion. The consensus target price is $47.40, and the 52-week range is $26.28 to $41.25. Halliburton has a dividend yield of 0.9%. The implied upside to the consensus target is 17%, and the target price is above the 52-week high.

Baker Hughes Inc. (NYSE: BHI) trades near $44.92 and has a market value of about $19.74 billion. The consensus target price is $48.90, and the 52-week range is $37.08 to $52.93. Baker Hughes has a dividend yield of 1.3%. The implied upside to the consensus target is 9%, and again the target price is above the 52-week high.

National Oilwell Varco Inc. (NYSE: NOV) trades near $68.22 and has a market value of about $29.1 billion. The consensus target price is $85.10, and the 52-week range is $59.07 to $89.95. National has a dividend yield of 0.8%. The implied upside to the consensus target is 25%, and again the target price is well above the 52-week high.

Transocean Ltd. (NYSE: RIG) trades near $56.44 and has a market value of about $20.25 billion. The consensus target price is $61.60, and the 52-week range is $39.32 to $59.03. Transocean does not pay a dividend. The implied upside to the consensus target is 9%, and the target price is above the 52-week high.

Ensco PLC (NYSE: ESV) trades near $63.05 and has a market value of about $14.6 billion. The consensus target price is $68.40, and the 52-week range is $41.63 to $65.19. Ensco has a dividend yield of 2.3%. The implied upside to the consensus target is 8%, and the target price is above the 52-week high.

Services firms tied closely to North America had a tough time in 2012 as cutbacks in natural gas drilling hit them hard. The one standout here, National Oilwell Varco, makes and sells components and products for drillers, among other things. The stock price actually dropped by more than 15% last year, but proposed drilling increases - particularly offshore - make this company a reasonable value play, not a value trap.

Refining Companies

Valero Energy Corp. (NYSE: VLO) trades near $45.61 and has a market value of about $25.22 billion. The consensus target price is $47.10 and the 52-week range is $20.00 to $46.09. Valero has a dividend yield of 1.8%. The implied upside to the consensus target is 3%, and the target price is above the 52-week high.

Phillips 66 (NYSE: PSX) trades near $62.20 and has a market value of about $38.97 billion. The consensus target price is $66.40, and the 52-week range is $28.75 to $63.25. Phillips 66 has a dividend yield of 1.6%. The implied upside to the consensus target is 7%, and the target price is above the 52-week high.

Marathon Petroleum Corp. (NYSE: MPC) trades near $78.46 and has a market value of about $26.57 billion. The consensus target price is $80.25, and the 52-week range is $33.65 to $78.37. Marathon has a dividend yield of 1.8%. The implied upside to the consensus target is 2%, and the target price is above the 52-week high.

A spread of $20 or more between the price of Brent and the price of WTI will keep refiners in nice profits. The spread is about $21 a barrel this morning, but has fallen to near $15 a barrel recently. Also watch for price targets to be raised.


Filed under: 24/7 Wall St. Wire, Oil & Gas, Value Investing Tagged: BHI, BP, CHK, CVX, EOG, ESV, featured, HAL, MPC, NOV, PSX, RIG, SLB, VLO, XOM

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