3 Stocks to Buy Now as Oil Prices Continue to Climb

NASDAQ: PDCE | PDC Energy, Inc. News, Ratings, and Charts

PDCE – Owing to the resurgence of COVID-19 cases and rampaging hurricanes in the United States, the oil supply has taken a hit. With a simultaneous, unprecedented rise in demand, oil prices have rallied to near three-year highs and are expected to increase further in the coming months. Given this backdrop, we think oil stocks PDC Energy (PDCE), Magnolia Oil and Gas Corp (MGY), and Oasis Petroleum (OAS) could be solid bets now. Let’s discuss.

Recent hurricanes and rising COVID-19 cases have negatively impacted the oil & gas industry. However, the market remains bullish, as evidenced by the increase in oil prices for five straight days to near three-year highs today. Brent crude hit  $79.52 per barrel.

Moreover, global oil demand is expected to hit  its pre-pandemic levels by next year. Goldman Sachs (GS) expects Brent crude oil prices to hit $90 per barrel by year’s end.

Oil and natural gas exploration and production stocks PDC Energy, Inc. (PDCE), Magnolia Oil & Gas Corporation (MGY), and Oasis Petroleum Inc. (OAS) are expected to benefit from the surging oil prices and the bullish industry trends. Thus, we think these stocks could be worth betting on now.

PDC Energy, Inc. (PDCE)

PDCE is an independent exploration and production company that develops unconventional oil and natural gas resources and is focused mainly on the Wattenberg Field in Colorado and the Delaware Basin in West Texas. PDCE is based in Denver, Colo.

On August 25, PDCE declared a $0.12 quarterly dividend on its outstanding common stock, which  was payable on September 22.

In its second fiscal quarter, ended June 30, PDCE’s total revenue increased 320.6% year-over-year to $228.87 million. Its adjusted EBITDAX rose 80.5% from the prior-year quarter to $358.30 million, while its adjusted EPS increased 1,085.7% from the same period last year to $1.66.

Analysts expect EPS to increase 51.9% year-over-year to $1.58 in the current quarter (ending September 2021). Likewise, the $558.78 million consensus revenue estimate for the current quarter indicates a 124.2% rise from the prior-year quarter. Furthermore,  PDCE has an impressive surprise earnings history; has topped consensus EPS estimates in each of the trailing four quarters.

The stock has gained 299.9% in price over the past year to close Friday’s trading session at $46.99.

PDCE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

PDCE has an A Momentum grade of A, and a Growth and Quality grade of B. In the 91-stock Energy – Oil & Gas industry, it is ranked #11.

Click here to see the additional POWR Ratings for PDCE (Value, Stability, and Sentiment).

Magnolia Oil & Gas Corporation (MGY)

MGY acquires, develops, and explores oil and natural reserves in the United States. The company is focused primarily on the Eagle Ford Shale and Austin Chalk formations. MGY is based in Houston, Tex. On September 24, MGY priced an underwritten block trade by affiliates of EnerVest, Ltd., of its Class A common stock. The trade generated gross proceeds to the selling stockholders of $122.85 million. The offering is expected to close on or about September 28.

MGY’s total revenue increased 202.7% year-over-year to $250.73 million in its second fiscal quarter, ended June 30. Its adjusted net income and adjusted net income per share came in at $98.23 million and $0.56, up substantially from their negative year-ago values. Its adjusted EBITDAX climbed  385.5% from the prior-year quarter to $195.07 million.

A $0.60 consensus EPS estimate for the current quarter (ending September 2021) reflects a 900% year-over-year increase. Likewise, the $271.88 million consensus revenue estimate for the current quarter indicates a 115% improvement from the same period last year. In addition, MGY beat consensus EPS estimates in three out of the trailing four quarters, which is impressive.

MGY’s stock has gained 202.7% in price over the past year and 135.4% year-to-date to close Friday’s trading session at $16.62.

MGY has an A grade for Momentum and Quality, and a B grade for Growth. It is ranked #20 out of the 91 stocks in the Energy – Oil & Gas  industry.

To see the additional POWR Ratings for Value, Stability, and Sentiment for MGY, click here.

Oasis Petroleum Inc. (OAS)

OAS is an independent company for the exploration and production of oil and natural gas. It operates through two segments: Exploration and Production(E&P); and Midstream. The Houston, Tex., company went public on November 20, 2020 after financial restructuring.

On June 29, OAS closed an offering of common units by its  Oasis Midstream Partners LP (OMP). Regarding the offering,  Danny Brown, OAS’ Chief Executive Officer, said, “The OMP common unit offering accomplishes the mutually beneficial objectives of increasing OMP’s public ownership and liquidity while highlighting the value of Oasis’ ownership. Oasis will continue to evaluate strategies to increase visibility into its ownership in OMP and close the current sum of the parts discount imbedded in its stock price. As Oasis generates significant free cash flow, it remains committed to returning cash to shareholders.” The company also declared a $4.00 per share special dividend,  payable on July 21, 2021.

For the three months ended June 30, OAS’ total revenue increased 136.3% year-over-year to $393.06 million. This can be attributed to a 172% year-over-year increase in oil & gas revenues to $255.23 million. Its net income attributable to OAS and EPS was $73.36 million and $3.52, respectively, representing a substantial increase  from their negative year-ago values.

The Street’s $19.99 EPS estimate for the next year (fiscal 2022) indicates a 42.6% year-over-year increase, and the Street’s $1.34 billion revenue estimate for the coming year reflects an 11.9% increase from the current year.

OAS’s stock has gained 158.8% in price year-to-date to close Friday’s trading session at $95.90.

It’s no surprise that OAS has an overall rating of B, which translates to Buy in our POWR Ratings system.

OAS has a Momentum grade of A, and a Growth, Value, and Quality grade of B. It is ranked #7 in the Energy – Oil & Gas  industry.

In addition to the POWR Rating grades we’ve stated above, one can see OAS ratings for Stability and Sentiment here.


PDCE shares were unchanged in after-hours trading Monday. Year-to-date, PDCE has gained 147.06%, versus a 19.55% rise in the benchmark S&P 500 index during the same period.


About the Author: Anushka Dutta


Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PDCEGet RatingGet RatingGet Rating
MGYGet RatingGet RatingGet Rating
OASGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Top 4 Tech Giants Poised for Explosive Growth

Fueled by the ever-growing demand for advanced technological solutions across various sectors and ongoing innovation, the tech industry has robust growth prospects. Thus, it could be wise to invest in top tech stocks Dropbox (DBX), TTM Technologies (TTMI), Lantronix (LTRX) and AstroNova (ALOT) for potential growth. Continue reading…

3 Top Rated Software Stocks to Streamline Your Investments

The software industry is thriving with soaring demand, presenting ample investment opportunities. So, fundamentally solid software stocks ServiceNow (NOW), Autodesk (ADSK), and Docebo (DCBO) might be ideal buys for promising returns. Read on...

Biotech Investors: Should You Buy, Hold, or Sell Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR)?

Despite facing several challenges, the biotech sector thrives due to growing demand for effective treatments, consistent innovations, and a sustained demand for high-quality drugs and therapies. Let's assess whether one should Buy, Hold, or Sell biotech stocks Moderna (MRNA) and Arrowhead Pharmaceuticals (ARWR). Keep reading...

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More PDC Energy, Inc. (PDCE) News View All

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