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Strong and consistent earnings demonstrate that a company is healthy. Another important indicator of vitality are significant growth projections for the next year. When these two traits are combined, a company is often well situated to continue what they are doing right, only a much larger scale. Today we screened for oil and gas stocks that have EPS growth rates of 25% or above, and have solid profit margins. We think you will be intrigued by our findings.

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 1-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.

The Operating Profit Margin is a profitability ratio that measures the effectiveness of the company's operating efficiency. This metric allows investors to see how much profit is left after all variable costs are covered. If the company's margin is increasing over time this means that it's earning more per dollar of sales. Finding trends in the Operating Profit Margin helps investors identify companies that are improving profitability over time and managing the economic landscape better than competitors.

The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue

We first looked for oil and gas stocks. We then screened for businesses that have high future earnings per share growth forecasts(1-year projected EPS Growth Rate>25%). We then looked for companies with strong profit margins (1-year operating margin>15%)(Net Margin [TTM]>10%). We did not screen out any market caps.

Do you think these stocks have higher to rise? Use our screened list as a starting point for your own analysis.

1) Laredo Petroleum Holdings, Inc. (LPI)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$3.09B
Beta:-

Laredo Petroleum Holdings, Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 60.87%, an Operating Profit Margin of 37.07%, and a Net Margin of 22.97%. The short interest was 3.14% as of August 10, 2012. Laredo Petroleum Holdings, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of oil and natural gas in the Permian and Mid-Continent regions of the United States.

The company's principal properties include the Permian Basin covering an area of 134,680 net acres in approximately 300 sections in the Wolfberry and deeper horizons located in west Texas and southeastern New Mexico; and the Anadarko Granite Wash property comprising 37,850 net acres situated in the Texas Panhandle and Western Oklahoma.

2) Carrizo Oil & Gas Inc. (CRZO)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$988.71M
Beta:2.04

Carrizo Oil & Gas Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 114.35%, an Operating Profit Margin of 21.09%, and a Net Margin of 18.98%. The short interest was 20.44% as of August 10, 2012. Carrizo Oil & Gas, Inc., an independent energy company, engages in the exploration, development, and production of oil and gas in the United States and the United Kingdom. The company holds interest in crude oil and liquids plays in the Eagle Ford Shale in south Texas; the Niobrara Formation in Colorado; the Utica Shale in Ohio and Pennsylvania; and the Huntington Field in the U.K.

3) QR Energy, LP (QRE)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$782.20M
Beta:-

QR Energy, LP has a 1-Year Projected Earnings Per Share Growth Rate of 200.00%, an Operating Profit Margin of 21.33%, and a Net Margin of 38.22%. The short interest was 0.94% as of August 10, 2012. QR Energy, LP, through its subsidiary, QRE Operating, LLC, engages in the acquisition, exploitation, development, and production of onshore crude oil and natural gas properties in the United States. As of December 31, 2011, its properties consisted of working interests in 3,867 gross producing wells located in Texas, New Mexico, Arkansas, Louisiana, southwestern Kansas, Oklahoma, Florida, and Alabama.

4) Midstates Petroleum Company, Inc. (MPO)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$530.70M
Beta:-

Midstates Petroleum Company, Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 350.00%, an Operating Profit Margin of 26.48%, and a Net Margin of 25.07%. The short interest was 3.63% as of August 10, 2012. Midstates Petroleum Company LLC engages in oil and gas exploration and development. The company was founded in 1993 and is based in Houston, Texas.

5) Warren Resources Inc. (WRES)

Sector:Basic Materials
Industry:Independent Oil & Gas
Market Cap:$208.62M
Beta:2.79

Warren Resources Inc. has a 1-Year Projected Earnings Per Share Growth Rate of 100.00%, an Operating Profit Margin of 24.97%, and a Net Margin of 23.98%. The short interest was 3.30% as of August 10, 2012. Warren Resources, Inc., an independent energy company, engages in the exploration, development, and production of onshore oil and natural gas reserves in the United States.

It focuses primarily on its waterflood oil recovery programs and horizontal drilling in the Wilmington field within the Los Angeles Basin of California; and on the exploration and development of coalbed methane properties located in the Rocky Mountain region. As of March 31, 2012, the company owned oil and natural gas leasehold interests in approximately 69,641 net acres located in the Rocky Mountains.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz.

Source: 5 Profitable Oil & Gas Stocks Projected For Growth