The energy research team at Raymond James Financial Inc. (NYSE: RJF) is encouraging customers of the firm to focus on domestic energy stocks that have the highest growth potential. From exploration and production to refining, they are very positive on certain U.S. names. In a new research report, they have highlighted their top stocks to buy.
Enterprise Products Partners (NYSE: EPD) is rated at the top of their list. Reporting another strong quarter of earnings that beat estimates, Enterprise Products is one of the top master limited partnership (MLP) names. The Thomson/First Call target estimate is $64. The company pays unitholders a 4.40% distribution. MLP distributions may contain return of principal
Valero Energy Corp. (NYSE: VLO) is one of the top refining names. Valero recently spun off its retail business to existing shareholders. The consensus price target for this top name is $48. Shareholders are paid a 2% dividend.
Alliance Holdings GP L.P. (NASDAQ: AHGP) is one of the four highest rated stocks at Raymond James. This producer of coal primarily to utilities and industrial users in the United States, has been trading near the top of its range. The consensus price target for the stock is $57.50. Unitholders receive a 5.30% distribution.
Alliance Resource Partners L.P. (NASDAQ: ARLP) is another entity of the same company. The advantage to investors is a higher distribution rate. The consensus price target is $75. Unitholders receive a 6.50% distribution.
Apache Corp. (NYSE: APA) is an independent exploration and production company that is a stock to buy. Down 25% from this time last year, insiders were buyers of the stock recently. Consensus estimate for the stock price is $95. Apache pays a 1.10% dividend. A move to the target price would represent almost a 30% gain for investors.
Questar Corp. (NYSE: STR) posted strong first-quarter earnings at its Gas Utility division yesterday. The consensus target for the stock is $25. Shareholders receive a 2.70% dividend.
Tesoro Logistics Partners L.P. (NYSE: TLLP) is another MLP to make the list of stocks to buy. The company operates in two segments — Crude Oil Gathering, and Terminalling, Transportation and Storage — with much of their business in the Bakken shale and the Williston basin. The vonsensus price target is $53. Unitholders are paid a 3.40% distribution.
Access Midstream Partners L.P. (NYSE: ACMP) is another popular MLP to make the Raymond James list. Solid portfolio acquisitions are driving earnings growth. The consensus price target is $44. Unitholders receive a 4.40% distribution.
QEP Resources Inc. (NYSE: QEP) rounds out the list of energy stock to buy. QEP is another independent exploration and production firm focusing on shale oil regions. The consensus for the stock is $38. Hitting the target would represent a 30% gain for investors.
Raymond James points out that domestic firms are hitting on all earnings cylinders now. In establishing a portfolio position in energy, it makes sense for investors to look at stocks from all the subsectors. Diversity helps lower the overall volatility and risk in what has been a somewhat underperforming sector this year.
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