APA Corporation: Shares Rapidly Disappearing, Not Too Late To Grab Some

Summary

• The situation currently facing APA Corporation could not be more different than two years ago.
• Whilst early 2020 saw their shareholder returns slashed following the onset of the now-infamous Covid-19 downturn, 2022 sees shareholder returns taking center stage.
• Their guidance forecasts circa $1.5b of further share buybacks for 2022 that would amount to 10% of their current market capitalization, thereby seeing their shares rapidly disappearing.
• When looking ahead, they are also deleveraging and thus future years could see a relatively higher portion of their free cash flow directed towards shareholder returns.
• Since this could still see a double-digit shareholder yield given their 2021 free cash flow, I believe that a buy rating is appropriate.

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Introduction

Two years ago amidst the onset of the now-infamous Covid-19 downturn of 2020, APA Corporation (NASDAQ:APA) slashed their shareholder returns to the barebones as they rushed to shore up their financial position. Fast forward

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.