2024-04-05 01:11:05 ET
Summary
- Despite current headwinds, I'm bullish on the future of natural gas due to strong international demand growth, current unusual headwinds, and slowing production growth.
- Range Resources stands out due to very efficient operations, a healthy balance sheet, an attractive valuation, and the potential for aggressive buybacks.
- While I believe RRC is at least 60% undervalued, investors need to be aware of its volatile profile and related risks.
Introduction
In my dividend growth portfolio, I own three energy stocks:
- Texas Pacific Land Corporation ( TPL ): This is a landowner in the Texas Permian. It benefits from oil and gas royalties, water royalties, and from every activity related to drilling, pipelines, and renewables on its land. It's sensitive to oil prices like an oil driller, yet much more efficient, as it does not produce any oil or gas itself.
- Canadian Natural Resources ( CNQ ): This Canadian giant has more than 40 years' worth of inventory, very low breakeven prices, and a policy to return 100% of its free cash flow to shareholders.
- Antero Midstream ( AM ): This company owns the midstream assets of Antero Resources ( AR ), making it my natural gas play without direct pricing exposure.
Although I am bullish on both oil and gas, I prefer to own companies with less exposure to natural gas prices - like midstream companies that own pipelines....
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For further details see:
Significant Upside Potential, As Range Resources Could Turn Into A Buyback Machine