The Zacks Oils and Energy sector has displayed notable relative strength over the last three months, adding +12% compared to the S&P 500’s modest gain. Rising energy prices have helped shift sentiment, with buyers stepping up after a rough first half.

And for those interested in tapping into the relative strength, three stocks – Pioneer Natural Resources PXD, EOG Resources EOG, and ConocoPhillips COP – could all be considerations.

All three reside within the top 50% of all Zacks industries, reflecting optimism among analysts. Let’s take a closer look at each.

Pioneer Natural Resources

Pioneer Natural Resources is an explorer and producer of oil, natural gas, and natural gas liquid with heavy exposure to the Permian basin. Analysts have taken their earnings expectations higher across all timeframes, landing the stock into a Zacks Rank #1 (Strong Buy).

The company exceeded the Zacks Consensus EPS Estimate by 9% in its latest release, with strong execution and oil production near the company’s high-end guidance range. Reflecting its shareholder-friendly nature, PXD repurchased more than $120 million of common stock and declared a quarterly base plus variable dividend.

And to top it off, the company raised the midpoints of its FY23 oil and total production guidance, with continued strong well productivity and efficiency within operations driving the upgrade. The company has enjoyed strong revenue growth over the last year.

EOG Resources

EOG Resources is primarily involved in exploring and producing oil and natural gas, with operations spread across the United States, China, and Trinidad. The company has seen positive earnings estimate revisions hit the tape across the board.

Income-focused investors could be attracted to EOG, with shares currently yielding a solid 2.6% annually. Dividend growth is also very apparent, with the company growing its payout by more than 10% just over the last year. And further showing its commitment to shareholders, EOG purchased roughly 2.8 million shares throughout its latest quarter, with $4.4 billion remaining in the current buyback program.

EOG is expected to see a growth slowdown in its current year off last year’s robust performance, with Zacks Consensus Estimates suggesting 20% lower earnings on 9% lower sales. Still, growth resumes in FY24, with earnings and revenue forecasted to increase 16% and 10%, respectively.

ConocoPhillips

ConocoPhillips is one of the world’s largest independent exploration and production companies based on proved reserves and production of liquids and natural gas. Despite falling short of earnings and revenue expectations in its latest release, buyers stepped up post-earnings, providing COP shares momentum.

There were several notable highlights from the above-mentioned quarterly release, including record production, a full-year production upgrade for the second consecutive quarter, and the announcement of a variable dividend for shareholders.

The favorable operating environment for COP has allowed it to grow its dividend payout nicely, up nearly 11% just over the last year.

Bottom Line

Energy stocks have delivered market-beating returns over the last several months, with the Zacks Oils and Energy sector seeing notable momentum.

And for those interested in tapping into the recent strength, all three stocks above – Pioneer Natural Resources PXD, EOG Resources EOG, and ConocoPhillips COP – should be worth consideration.
ConocoPhillips (COP): Free Stock Analysis Report

Pioneer Natural Resources Company (PXD): Free Stock Analysis Report

EOG Resources, Inc. (EOG): Free Stock Analysis Report

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