The major benchmark indices delivered a weak performance for the first quarter of 2022 amid investor concerns over rising interest rates, the war in Ukraine, and inflation. However, stocks were modestly higher on the first day of the new quarter, closing near session highs. The S&P 500 rose 0.34% to 4,545.86, while the Nasdaq Composite gained 0.29% to 14,261.50, and the Dow Jones Industrial Average added 139.92 points to close at 34,818.27.
April is traditionally the best month for stocks and is historically the best month for the S&P 500. The market is expected to remain focused on developments around the war, and the Federal Reserve’s plans to tighten its monetary policy.
Despite the market volatility, S&P 500 stocks Occidental Petroleum Corporation (OXY), The Mosaic Company (MOS), and Marathon Oil Corporation (MRO) have gained more than 50% in price this year and could continue to soar.
Occidental Petroleum Corporation (OXY)
Houston, Tex.-based OXY engages in the acquisition, exploration, and development of oil and gas properties and operates through three segments: Oil and Gas; Chemical; and Midstream and Marketing.
Last month, Oxy Low Carbon Ventures, a subsidiary of OXY and Weyerhaeuser Co. (WY), announced their lease agreement to develop a carbon capture and sequestration project on a 30,000-acre space in Louisiana. This is expected to help the company expand its business operations and reduce its carbon emissions.
Also in March, OXY announced an agreement with SK Innovation Co. Ltd. to produce the first net-zero oil using environmental attributes. As per the agreement, SK Trading may purchase up to 2,00,000 barrels of net-zero oil per year for the next five years to develop net-zero products. This is expected to increase OXY’s revenue stream and may prove beneficial for the company.
OXY’s total revenue and other income increased 139.2% from the prior-year quarter to $8.01 billion in its fiscal fourth quarter, ended Dec. 31, 2021. Its non-GAAP net income attributable to common stockholders for the quarter came in at $1.45 billion, reflecting a 337.4% increase year-over-year, while its non-GAAP EPS stood at $1.48 billion, up 327.7% year-over-year.
OXY’s revenue for its fiscal year ending Dec. 31, 2022, is expected to come in at $30.56 billion, indicating a 16.1% year-over-year growth. The company’s EPS is expected to increase 144.5% from its year-ago value to $6.24. OXY also beat the consensus EPS estimates in each of the trailing four quarters.
OXY’s stock has gained 112.2% in price over the past year and 100.5% year-to-date to close its last trading session at $58.11.
OXY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which translates to Buy in our POWR ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The company has an A grade in Growth and Momentum and a B in Quality. It is ranked #36 of 95 stocks in the B-rated Energy – Oil & Gas industry.
To get OXY’s ratings for Stability, Sentiment, and Value, click here.
The Mosaic Company (MOS)
MOS in Plymouth, Minn., produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. It operates through the three segments of Phosphates; Potash; and Mosaic Fertilizantes.
MOS announced on February 24 that it has entered an accelerated share repurchase program to repurchase $400 million of its common stock with Goldman Sachs & Co. LLC. The program’s final settlement is expected to be completed in the second quarter of 2022. The share repurchase should improve shareholder returns.
MOS’ net sales increased 56.3% year-over-year to $3.84 billion in its fiscal fourth quarter, ended Dec. 31, 2021. Its operating earnings grew 228.9% from its year-ago value to $969.70 million. The company’s net cash provided by operating activities increased 80.5% year-over-year to $430.40 million. Also, its cash, cash equivalents, and restricted cash balance stood at $786.30 million, up 32.3% from the prior-year quarter.
The $2.22 consensus EPS estimate for its fiscal first quarter, ending March 31, 2022, represents a 290.1% improvement year-over-year. The $4.11 billion consensus revenue estimate for the same quarter represents a 78.9% increase from the same period last year.
Over the past year, MOS has gained 110.8% in price and 67.7% year-to-date to close its last trading session at $65.88.
MOS’ POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system.
MOS has an A grade in Growth. It is ranked #9 of the 30 stocks in the Agriculture industry.
Beyond what is stated above, we have also rated MOS for Quality, Value, Momentum, Stability, and Sentiment. Get all the MOS ratings here.
Marathon Oil Corporation (MRO)
MRO engages in the exploration and production of crude oil and condensate, natural gas liquids, natural gas, and their byproducts. The Houston, Tex.-based company operates through two segments, the United States and International.
In January, the company announced a dividend of 7 cents per share, which was payable on March 10, 2022. It marks MRO’s fourth consecutive increase in its quarterly base dividend. Furthermore, the company has increased its base dividend by more than 130% over the last year.
MRO’s total revenues and other income increased 116.9% year-over-year to $1.80 billion in its fiscal fourth quarter, ended Dec. 31, 2021. Its income from operations improved 395.6% year-over-year to $739 million. The company’s non-GAAP net income increased 704.1% from its year-ago value to $592 million, while its non-GAAP net income per share stood at $0.77, up 741.7% year-over-year in the same period.
The $0.90 consensus EPS estimate for its fiscal first quarter, ending March 31, 2022, represents a 329.6% improvement year-over-year. The $1.65 billion consensus revenue estimate for the same quarter represents a 54.3% increase from the same period last year. MRO has an impressive earnings surprise history; it topped the Street’s EPS estimates in each of the trailing four quarters.
The stock has gained 118.4% in price over the past year and 56.8% year-to-date to close yesterday’s trading session at $25.75
MRO’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system.
MRO has an A grade in Momentum and Quality and a B in Growth and Sentiment. It is ranked 23 in the Energy – Oil & Gas industry.
Click here to view additional MRO ratings for Value and Stability.
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OXY shares were trading at $57.82 per share on Monday morning, down $0.29 (-0.50%). Year-to-date, OXY has gained 99.92%, versus a -4.19% rise in the benchmark S&P 500 index during the same period.
About the Author: Komal Bhattar
Komal's passion for the stock market and financial analysis led her to pursue investment research as a career. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...
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