For the time being, global crude prices are caught between the Chinese economy and the Russian military.
The consensus over China appears to for a slowdown in the near-term at least, meaning less demand, and lower commodity prices, especially if it turns out to be something even worse than a slowdown. With regard to events in Eastern Ukraine, however, consensus is a significantly more complicated affair, though Russia’s decisive and unflinching display of military power over the last two weeks should leave no doubt about its ability, if not intent, to take hold other former Soviet territories after Crimea, a scenario that would no doubt result in higher crude prices.
While it is not clear what this will mean for oil and gas stocks, investors who are seeking refuge from global headwinds may want to take a look at independent US producers who are somewhat less vulnerable to the economic and political events currently shaking global markets.
The following six independents represent a wide section of the market-cap scale, and bear the kind of fundamentals that pave the way for growth and profits in the future.
● Return on Equity equal to or greater than 15 percent: A robust ROE indicates that a company is both fiscally prudent and operationally disciplined enough to generating profits out of the money it receives from shareholders.
● Debt/Equity Ratio less than 1: Given the lengthy duration of oil and gas projects, the market can tolerate relatively higher debt levels from independents, and that makes producers who keep their borrowing down all the more attractive (as long as they manage to remain profitable as well, of course).
● Earnings per Share Growth of 50 percent or greater in 2014: Independent producers who see drastic gains in net-income on a per share basis could very well be reaping the rewards of a successfully completed project, or the acquisition of acreage with proven reserves.
Cimarex Energy Co. (XEC)
Market-Cap & Price: $9.75 billion / $111.89 per share
Return on Equity (ttm): 23.10 percent
Debt/Equity Ratio: 0.23
Earnings-per-Share & 2104 EPS Growth: $6.47 / +58.60 percent
Panhandle Oil and Gas Inc. (PHX)
Market-Cap & Price: $347.56 million - $45.50 per share
Return on Equity (ttm): 18 percent
Debt/Equity Ratio: 0.06
Earnings-per-Share & 2104 EPS Growth: $2.01 / +89.90 percent
Cabot Oil & Gas Corporation (COG)
Market-Cap & Price: $14.22 billion / $33.96 per share
Return on Equity (ttm): 12.50 percent
Debt/Equity Ratio: 0.52
Earnings-per-Share & 2104 EPS Growth: $0.66 / +112.90 percent
Delek Logistics Partners LP (DKL)
Market-Cap & Price: $784.05 million / $32.62 per share
Return on Equity (ttm): 69.70 percent
Debt/Equity Ratio: 0
Earnings-per-Share & 2104 EPS Growth: $3.40 / +170.50 percent
EOG Resources Inc. (EOG)
Market-Cap & Price: $50.38 billion / $185.97 per share
Return on Equity (ttm): 15 percent
Debt/Equity Ratio: 0.38
Earnings-per-Share & 2104 EPS Growth: $8.04 / +281 percent
Equal Energy Ltd. (EQU)
Market-Cap & Price: $189.31 million / $5.30 per share
Return on Equity (ttm): 38.60 percent
Debt/Equity Ratio: 0.27
Earnings-per-Share & 2104 EPS Growth: $0.34 /+290.90 percent
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