Following the collapse of several banks in the last one week, valuations of many banking stocks have declined sharply and are now trading at huge discounts.
One investor, however, who certainly won’t be looking for a bargain amid the carnage is “Shark Tank” star Kevin O’Leary. With the government stepping in to protect depositors from the failures of SVB and Signature Bank, O’Leary anticipates a flurry of tighter regulation around banks, regional or not, will eat up any potential gains.
“If you thought putting your money in bank stocks was a good idea,” says O’Leary, “you should change your mind forever this morning.”
So, where should investors be looking now? Easy. According to O’Leary, energy is where to be. energy stock There’s cash flow and distribution, and O’Leary recently described the sector as looking “golden” and poised to move from here.
With that in mind, we dipped into the TipRanks database and pulled out the details on two energy stocks that investors should consider adding to portfolios. Analysts on the Street certainly think these are worth a punt — both are rated as Strong Buys by the analyst consensus.
Marathon Petroleum (mpc,
We’ll start with Marathon Petroleum, America’s largest independent refiner. The company’s refining activities include refining crude oil and other feedstocks, while Marathon also boasts branded locations – including retail outlets – spread throughout the United States. Additionally, through its refining logistics assets and a network of pipelines, terminals, towboats and barges, the company handles, stores and distributes crude oil and refined products primarily to the refining and marketing sector. These midstream activities are conducted by its subsidiary, MPLX, which is majority owned by MPC.
It’s a business that’s flourishing at such times, as was evident in the company’s latest quarterly report — for 4Q22. Revenue grew 12.6% year-over-year to $40.09 billion, while beating street calls by $4.8 billion. Adjusted net income came in at $3.1 billion, or $6.65 per diluted share, which was higher than distributed net income of $794 million, or $1.30 per diluted share, in the same period last year. This figure easily beat the forecast of $5.53.
During 2022, MPC plans to return $13.2 billion of capital to shareholders – $11.9 billion through share repurchases and the remainder through Dividend – Quarterly payments are currently $0.75, yielding 2.4%. In addition, the company also announced an incremental $5 billion share repurchase authorization.
What it all boils down to, according to Jefferies analyst Dushyant Ailani, is that this is a company that will continue to deliver the goods for investors for years to come.
“The strong FCF generation, cash balance, and distributions from MPLX give us confidence in MPC’s ability to return capital to shareholders through the cycle,” explained Ailani. “Assuming ~75% of OCF is returned to shareholders (same as ’22), we estimate that MPC has the ability to buy back ~$23bn by 2025, or 38% of its market cap.”
Accordingly, Elani rates MPC a buy, while his $157 price target suggests the stock will soar 23% in the coming year. (To see Elani’s track record, Click here,
All of Elani’s allies agree, except for one skeptic; An additional 10 Buys dominates a lone Hold, giving this stock a Strong Buy consensus rating. With an average target of $147.92, investors would be sitting on a 16% return a year from now. (Look mpc stock forecast,
Targa Resources (TRGP,
Then there’s Targa Resources, one of the largest independent midstream players in North America. The company distributes natural gas and natural gas liquids throughout the United States, while its gathering and processing assets are strategically located in some of America’s most attractive basins – Targa’s Permian Basin, Bakken Shale, Barnett Shale, Eagle Ford Shale, Anadarko operating in the basin. , Arkoma Basin, onshore Louisiana and the Gulf of Mexico.
The company had displayed some record numbers in its Q4 and full year 2022 reports. Despite year-on-year decline Income, Targa saw a substantial increase in its adjusted EBITDA as compared to the same period a year ago. The company delivered a record adjusted EBITDA of $840.4 million, up 47.28% from $570.6 million reported in 4Q21. And for the full year, adjusted EBITDA reached a record high of $2.90 billion, well above the $2.05 billion reported for full year 2021. Q4 net income came in at $318.0 million, a major improvement on the year over year performance from a net loss of $313.0 million. – Fire Quarters.
As a bonus for income-minded investors, Targa also pays a dividend; The quarterly payout is currently $0.35, which produces a yield of 1.94%.
For Scotiabank analyst Tristan Richardson, Targa’s value proposition lies in its being one of the segment leaders. He writes: “With a client portfolio that has grown dramatically over the past several years as a result of client consolidation and a higher grading of contract terms, we expect earnings stability to increase over — namely, 2023 and 2024.” versus low commodity variability. Last year. Targa remains in the commodity cycle business with large stable producers reacting to price signals in the market; however, its integrated model, large gathering and processing (G&P) supply funnel, and water With the condition on, the targa is one of the best in midstream.
These comments support Richardson’s Outperform (Buy) rating and $115 price target. There is an upside potential of 59% from the current levels. (To see Richardson’s track record, Click here,
Boasting a full house of only — 12, total Buys — this stock naturally boasts a Strong Buy consensus rating. The average target currently stands at $100.58, suggesting shares will climb as much as 39% over the one-year time frame. (Look TRGP Stock Forecast,
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Disclaimer: The views expressed in this article are those of select analysts only. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.