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To anyone who has watched the numbers climb higher as you fill up the gas tank, it is not surprising that some oil and gas companies are pulling in exceptional profits. While these prices are a financial drain for consumers, from an investment perspective, finding oil and gas companies that have honed in on profitability makes sense. With this in mind, we ran a scan to find oil and gas stocks that not only have strong earnings, but have steadily increased their profitability. In addition, they all have projected EPS growth rates above 25% for the coming year. If oil and gas stocks with strong profitability and growth projections appeal to you, then you will like the list below.

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.

Return on Assets [ROA] illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how profitable the company is relative to the assets in current possession. As well, it lets investors see how efficient and effective management is at generating earnings from the company's assets. While most management teams can probably make money by throwing money at an issue very few can make very large profits with little investment.

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.

We first looked for oil & gas stocks. From here, we then looked for companies with strong profit margins (1-year operating margin>15%)(ROA [TTM]>10%). From here, we then looked for companies with estimated high-growth, with 1-year projected EPS growth above 25%. We did not screen out any market caps.

Do you think these stocks have strong enough fundamentals to move higher? Use our list along with your own analysis.

1) CNOOC Ltd. (CEO)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$90.64B
Beta1.38

CEO stock chart

Key Metrics

Operating Profit Margin35.94%
Return on Assets16.17%
1-Year Projected Earnings Per Share Growth Rate36.26%
Short Interest0.13%

CNOOC Limited, through its subsidiaries, engages in the exploration, development, production, and sale of crude oil, natural gas, and other petroleum products. Its oil and natural gas properties are located in offshore China, which include Bohai Bay, western South China Sea, eastern South China Sea, and East China Sea, as well as in Indonesia, Iraq, other regions in Asia, Australia, Nigeria, Uganda, the United States of America, Canada, and Argentina. The company is headquartered in Central, Hong Kong, and is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. CNOOC Limited is a subsidiary of China National Offshore Oil Corporation.

2) Vaalco Energy Inc. (EGY)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$473.79M
Beta0.98

EGY stock chart

Key Metrics

Operating Profit Margin60.91%
Return on Assets13.49%
1-Year Projected Earnings Per Share Growth Rate56.79%
Short Interest6.98%

VAALCO Energy, Inc., an independent energy company, together with its subsidiaries, engages in the acquisition, exploration, development, and production of crude oil and natural gas. The company owns producing properties and conducts exploration activities as an operator of consortiums internationally in Gabon and Angola, as well as conducts exploration activities as a non-operator in the British North Sea. VAALCO Energy, Inc. was founded in 1984 and is headquartered in Houston, Texas.

3) Rosetta Resources, Inc. (ROSE)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$2.41B
Beta2.11

ROSE stock chart

Key Metrics

Operating Profit Margin50.67%
Return on Assets15.09%
1-Year Projected Earnings Per Share Growth Rate48.35%
Short Interest9.26%

Rosetta Resources Inc., an independent exploration and production company, engages in the acquisition, exploration, development, and production of onshore oil and gas resources in the United States. It owns producing and non-producing oil and gas properties located primarily in South Texas, including the Eagle Ford, and in the Southern Alberta Basin in Northwest Montana. Rosetta Resources Inc. was incorporated in 2005 and is headquartered in Houston, Texas.

4) Evolution Petroleum Corp. (EPM)

SectorBasic Materials
IndustryIndependent Oil & Gas
Market Cap$240.24M
Beta1.33

EPM stock chart

Key Metrics

Operating Profit Margin49.16%
Return on Assets10.38%
1-Year Projected Earnings Per Share Growth Rate145.16%
Short Interest4.38%

Evolution Petroleum Corporation, together with its subsidiaries, engages in the acquisition, exploitation, and development of properties for the production of crude oil and natural gas in the United States. It holds interests in the Delhi Field EOR project located in northeast Louisiana; Giddings Field project located in central Texas; and Lopez Field project located in south Texas. The company is headquartered in Houston, Texas.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 10/15/2012.

Source: 4 High-Profit Oil And Gas Stocks Predicted For Strong Growth