2024-03-24 04:10:08 ET
Summary
- Marathon Oil shares have soared year-to-date due to high petroleum prices.
- The company is a concentrated resource play with major production in several U.S. shale basins where oil production grew 28% in FY 2023.
- Marathon Oil generates significant free cash flow and is set to aggressively buy back shares in FY 2024.
- Shares trade at a 15% earnings yield and are cheap.
Fundamentals in the U.S. economy continue to support an investment in exploration company Marathon Oil ( MRO ) whose shares have soared more than 20% year to date. The energy company benefits from petroleum prices that have stabilized at around $80 per barrel after OPEC+ members, led by Saudi Arabia and Russia, earlier this month agreed to extend voluntary supply cuts into the second-quarter. Marathon Oil also guided to return at least 40% of its cash flow from operations to shareholders in this high-price market, which could yield a significant reduction in the company's outstanding shares. I believe that Marathon Oil is a very concentrated resource play for energy investors and the company’s shares are attractively valued based off of earnings!...
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Marathon Oil: Strong Setup For 2024