3 Natural Gas Stocks to Buy in February: Cabot Oil & Gas, EQT, and Range Resources

NYSE: COG | Cabot Oil & Gas Corporation  News, Ratings, and Charts

COG – The natural gas industry is expected to rebound to pre-pandemic levels this year as economies worldwide resume operations in their manufacturing sectors. With widespread COVID-19 vaccinations reducing the need for social distancing, as is hoped, the industrial sector is expected to operate at full capacity soon, boosting the demand for natural gas around the globe. So, stocks like Cabot Oil & Gas (COG), EQT (EQT) and Range Resources (RRC) are well-positioned to ascend in the upcoming months we think. Let’s take a closer look at these names.

The Covid‑19 outbreak triggered an unprecedented and precipitous crude oil demand shock, resulting in a 40% decline in prices in the first quarter of 2020. According to EIA, consumption of natural gas in the U.S.  averaged 83.1 billion cubic feet per day (Bcf/d) in 2020, down 2.5% compared to 2019. This collapse was further intensified by a short-lived, yet aggressive, Saudi Arabia-Russia price war.

However, after a 4% decline  in 2020, natural gas demand has been returning steadily and is now close to its pre-crisis level with the resumption of industrial activity globally.

The Asia Pacific region accounts for more than half of global gas consumption, driven principally by the development of gas in China and India. With growing optimism surrounding a coronavirus-vaccine-driven economic recovery this year, demand from the industrial and power generation sectors is gradually rebounding. Moreover, experts expect generally upward price pressures in 2021 amid relatively low natural gas production to balance the supply and demand. EIA expects combined U.S. residential and commercial natural gas consumption to average 22.4 Bcf/d in 2021, up 5.8% from 2020.

Though the Biden-led U.S. Presidential administration’s clean energy drive is a potential threat to this industry, the demand for natural gas and oil is expected to hold steady in the near future because  the cost of renewable energy infrastructure is substantial.

With a nationwide vaccination drive and V-shaped economic recovery, companies like Cabot Oil & Gas Corporation (COG), EQT Corporation (EQT) and Range Resources Corporation (RRC) are expected to deliver decent returns in the coming months given their disciplined capital allocation and sustainable balance sheets. 

Cabot Oil & Gas Corporation (COG

COG is an independent oil and gas company engaged in the development, exploitation and marketing of oil and gas properties throughout the continental United States. The company serves primarily industrial customers, local distribution companies, gas marketers, and power generation facilities through gathering systems and pipelines.

COG’s daily equivalent production increased 7.9% sequentially to 2,406 million cubic feet equivalent per day of 100% natural gas in the third quarter ended September 30, 2020. Despite a historically low natural gas price environment, the company has demonstrated its ability to deliver profits. Its adjusted EPS has increased 80% from the prior quarter to $0.09, while its free cash flow has improved 99.5% over the same period.

Analysts expect its revenue to grow 42.8% year-over-year to $551.86 million in the current quarter (ending March 31, 2021). A consensus EPS estimate of $0.43 for the current quarter represents a 207.1% improvement year-over-year. The company has an impressive earnings surprise history;  it beat the Street’s EPS estimates in three of the trailing four quarters. The stock has gained 25.6% over the past year.

How does COG stack up for the POWR Ratings?

A for Trade Grade

B for Peer Grade

B for Overall POWR Rating.

The stock is currently ranked #15 of 111 stocks in the Energy – Oil & Gas Industry.

EQT Corporation (EQT

Based in the Marcellus and Utica shales of the Appalachian Basin, EQT operates as a natural gas production company producing natural gas, natural gas liquids (NGLs), and crude oil.

On December 10, EQT Infrastructure, a global investment organization under EQT corp. acquired a Denmark passenger ferry company, Molslinjen, to decarbonize its  ferry fleet and accelerate its  transition to renewable fuel sources. Given the shared goals of both the entities, the acquisition  is expected to generate positive returns in  coming years.

EQT’s total sales volume has increased 5.9% sequentially to 366,138 million cubic feet in the third quarter ended September 30, 2020. Its adjusted EBITDA has increased slightly from the prior quarter to $334.21 million, while its free cash flow has improved 157% to $46.72 million over the same period. Moreover, EQT reported year-end (December 31) total proved reserves of 19.8 Tcfe, an increase of 13% year-over-year.

Analysts expect EQT’s revenues to grow 12.8% year-over-year to $1.08 billion in the current quarter (ending March 31, 2020).  A consensus EPS estimate of $0.18 for the current quarter represents  a 28.6% improvement year-over-year. The stock has gained 140.2% over the past year.

EQT’s POWR ratings reflect this promising outlook. It has an overall rating of “Buy” with an “A” for Trade Grade and Peer Grade, and a “B” for Buy & Hold Grade. It is currently ranked #17 of 111 stocks in the same industry. 

Range Resources Corporation (RRC)

Focused in the Appalachian and North Louisiana regions of the United States, RRC is engaged in the exploration, development and acquisition of natural gas and crude oil properties. The company serves primarily marketing and midstream companies, industrial users, petrochemical end users, NGL distributors, and natural gas processors.

This month, U.S. Well Services, Inc. (USWS) extended its contract to provide electric hydraulic fracturing services to  RRC in the Appalachian Basin. This will enable RRC to dramatically decrease  emissions and sound pollution while generating exceptional operational efficiencies and significant customer fuel cost savings.

RRC’s non-GAAP total revenues have increased 1.5% sequentially to $509.86 million in the third quarter ended September 30, 2020. Total oil and gas sales have increased 9.2% from the prior quarter to $381.55 million, while its non-GAAP EPS has improved 50% sequentially over the same period.

Analysts expect revenues to grow 31.1% year-over-year to $566.35 million in the current quarter (ending March 31, 2020). A consensus EPS estimate of $0.27 for the current quarter represents  a 575% improvement year-over-year. The company has an impressive earnings surprise history; it beat the Street’s EPS estimates in three of the trailing four quarters. The stock has gained 167.2% over the past year.

RRC is rated a “Buy” in our POWR Ratings system. It has an “A” for Trade Grade and Peer Grade. In 111 stocks of the same Industry, it is ranked #21.

Want More Great Investing Ideas?

“MUST OWN” Growth Stocks for 2021

#1 Ingredient for Picking Winning Stocks

7 Best ETFs for the NEXT Bull Market

5 WINNING Stocks Chart Patterns


COG shares were trading at $19.05 per share on Wednesday afternoon, up $0.66 (+3.59%). Year-to-date, COG has gained 17.65%, versus a 0.14% rise in the benchmark S&P 500 index during the same period.


About the Author: Rishab Dugar


Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
COGGet RatingGet RatingGet Rating
EQTGet RatingGet RatingGet Rating
RRCGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Why Do Most Investors Fail?

Most individual investors underperform the stock market (SPY). Sadly 85% of mutual fund managers also come up short of the mark. So what does work? Quant investing which now makes up more than 50% of daily trading activity. However, these method seem out of reach for most investors. That is all about to change as I will show 5 ways to apply quant investing models to help you beat the market going forward. Read on for more...

:  |  News, Ratings, and Charts

2 Recent IPOs to Buy on the Dip

IPOs are always an interesting asset class as there is considerable upside but it comes with more risk. Recently, IPOs have underperformed, but it could be an opportunity to add two high-quality ones - ZIM Integrated Shipping Services Ltd. (ZIM) and ZipRecruiter (ZIP).

:  |  News, Ratings, and Charts

4 Value Stocks to Load Up on During the Market Sell-Off

Concerns over the spread of the COVID-19 Delta variant in several countries are expected to keep the stock market on edge. However, because a long and deep market correction is not expected, it could be wise to bet on promising stocks that are now trading at discounts. For example, Honda Motor (HMC), Hill-Rom Holdings (HRC), Foot Locker (FL), and Boise Cascade (BCC) look undervalued at their current price levels. So, we think these stocks could be solid bets now. Let’s discuss.

:  |  News, Ratings, and Charts

3 Unstoppable Tech Stocks to Buy on Dips

Growth stocks have taken a backseat to cyclical names this year, but that may be about to change. The Fed appears to be sticking with its dovish monetary policy and rising cases of COVID-19 could lead to a return to lockdowns.This presents a great buying opportunity to pick up shares of tech stocks like Teradata Corporation (TDC), HP Inc. (HPQ), and Broadcom Inc. (AVGO).

:  |  News, Ratings, and Charts

4 Value Stocks to Load Up on During the Market Sell-Off

Concerns over the spread of the COVID-19 Delta variant in several countries are expected to keep the stock market on edge. However, because a long and deep market correction is not expected, it could be wise to bet on promising stocks that are now trading at discounts. For example, Honda Motor (HMC), Hill-Rom Holdings (HRC), Foot Locker (FL), and Boise Cascade (BCC) look undervalued at their current price levels. So, we think these stocks could be solid bets now. Let’s discuss.

Read More Stories

More Cabot Oil & Gas Corporation (COG) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All COG News