Opinions
The Panic-Proof Portfolio (Stockchase Research)
APA Corporation
APA-N
TOP PICK
Aug 08, 2024
$28.235
Stock price when the opinion was issued
oil
gas
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Stockchase Research Editor: Michael O'Reilly
In recently reported earnings, APA indicated they expect operational efficiencies to result in $130 million in cost savings. The company has been prudently using cash reserves to aggressively retire debt and buy back shares -- all while providing a good dividend supported by a payout ratio under 50% of cash flow. It trades at 6x earnings, 1.1x book and supports a 25% ROE. We recommend setting a stop-loss at $13, looking to achieve $23 -- upside potential of 33%. Yield 5.8%
(Analysts’ price target is $22.89)
oil
gas
The 400,000 boed oil and gas producer with production in the US Permian, Egypt, and the North Sea recently reported a 42% increase in net income. It trades at 6x earnings, under 2x book and supports a robust 79% ROE. Its dividend is backed by a payout ratio under 15% of cash flow. We recommend setting a stop-loss at $22, looking to achieve $39 -- upside potential of 36%. Yield 3.7%
(Analysts’ price target is $39.08)