EOG Resources
Inc. engages in the exploration, development and production of natural gas and
crude oil primarily in the US, Canada and offshore Trinidad. The company
has grown profits and dividends at a 10-20% rate over the last ten years while
earning a 7-20% return on equity. EOG suffered along with most energy
related companies in the recent economic downturn. However, management
expects results in 2011 to improve and put the company back on a course of
rising profits and dividends as a result of:
(1) a huge inventory of drilling opportunities [Eagle Ford,
Bakken],
(2) growing emphasis on crude
oil production, now growing at a 30-50% annually rate,
(3) management’s focus on rationalizing operations,
Negatives:
(1) lack of international diversification,
(2) fluctuations in energy prices,
(3) intense competition.
EOG is
rated A by Value Line, carries a 26% debt to equity ratio and its stock yields
0.6%.
Statistical Summary
Stock
Dividend
Payout # Increases
Yield Growth Rate
Ratio Since 2004
EOG
0.6% 20%
12%
10
Ind Ave 2.4
3
41
NA
Debt/
EPS Down
Net Value Line
Equity
ROE Since 2004
Margin Rating
EOG 26%
19% 4
18% A
Ind Ave 37
11
NA
14 NA
Chart
Note: EOG
stock made great progress off its March 2009 low, quickly surpassing the
downtrend off its May 2008 high (straight red line) and the November 2008
trading high. Long term, the stock is in
an uptrend (blue lines). Intermediate
term it is in a trading range (purple lines) though it has been struggling to
regain its former uptrend. The
wiggly red line is the 50 day moving average.
The Aggressive Growth Portfolio owns a full position in EOG. The upper boundary of its Buy Value Range is
$65; the lower boundary of its Sell Half Range is $171.
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