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Zacks Value Trader Highlights: Diamondback Energy, EOG Resources, SLB, Exxon Mobil and Chevron

For Immediate Release

Chicago, IL – June 17, 2024 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2288176/cheap-energy-stocks-values-or-traps)

Cheap Energy Stocks: Values or Traps?

Welcome to Episode #372 of the Value Investor Podcast.

  • (0:20) - Where Should You Be Looking To Find Value In Energy Stocks?

  • (5:15) - Tracey’s Top Stock Picks For Your Portfolio

  • (22:30) - Episode Roundup: FANG, EOG, SLB, XOM, CVX, TTE

  • Podcast@Zacks.com

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Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

It's time to look at the energy stocks again. Periodically, over the last 3 years, Tracey has featured the energy stocks, especially the oil producers, as they have been hated by the stock market and appeared cheap.

Currently, many trade with P/Es under 15 and some are even cheaper, with P/Es in the single digits. Warren Buffett and Berkshire Hathaway keep diving in too. Berkshire continues to add to its Occidental Petroleum position this year.

Is Buffett getting it right?

Are energy stocks true values?

What is the Difference Between a Value Stock and a Trap?

Remember, a value stock is defined not by the price of the stock but by its valuation. They usually have low P/E and P/S ratios, among other criteria. But lots of stocks can qualify by that metric.

A cheap stock becomes a trap when the earnings are expected to decline. Value investors want cheap stocks where earnings are still expected to grow. In fact, all investors should want stocks with rising earnings.

Are earnings expected to rise, or fall, in the energy complex in 2024?

5 Cheap Energy Stocks: Values or Traps?

1. Diamondback Energy, Inc. FANG

Diamondback Energy is a large cap US oil and natural gas producer which drills in the Permian Basin. Diamondback Energy is cheap with a forward P/E of just 10.

Earnings are expected to rise 6.2% in 2024. And analysts have gotten bullish in the last week with 2 estimates revised higher in that time. The Zacks Consensus is now looking for $19.13 versus $18.01 last year.

Is Diamondback Energy a value or a trap?

2. EOG Resources, Inc. EOG

EOG Resources is a large cap energy exploration and production company with US domestic drilling, including the Permian Basin, as well as in Trinidad & Tobago. EOG Resources is also cheap with a forward P/E of 10.

EOG Resources is shareholder friendly, with a dividend yielding 3% and $3.3 billion left on its share authorization as of its first quarter earnings report.

Is EOG Resources a value or a trap?

3. SLB SLB

SLB is a global technology company that provides innovative services to the energy industry. Shares of SLB have dropped 15% over the last 3 months. It is cheap with a forward P/E of just 12.8.

SLB also pays a dividend, currently yielding 2.5%.

2024 sales are expected to rise 17.9%. The shares appear to be on sale.

Is SLB a value stock or a trap?

4. Exxon Mobil Corp. XOM

Exxon Mobil is one of the largest oil companies in the United States. It explores and produces energy globally, including in Guyana. Exxon Mobil hit new highs earlier this year but has since pulled back.

It's cheap, with a forward P/E of 11.9. Exxon Mobil is also shareholder friendly with a dividend yielding 3.4%.

Is Exxon Mobil a value or a trap?

5. Chevron Corp. CVX

Chevron is also one of the largest oil companies in the United States. Like Exxon, it also has global operations.

Shares of Chevron have fallen 7.8% in the last month. It's cheap, with a forward P/E of just 11.5. Chevron also pays out one of the highest yields in the Dow, at 4.2%.

Sales are expected to rise 2.7% in 2024.

Is Chevron a value or trap?

What Else Should You Know About Energy Stocks?

Tune into this week's podcast to find out.

[In full disclosure, Tracey owns shares of XOM and CVX in her personal portfolio. Zacks Value Investor owns XOM.]

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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Chevron Corporation (CVX) : Free Stock Analysis Report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Schlumberger Limited (SLB) : Free Stock Analysis Report

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

Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report

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