5 Oil Stocks That Are Expected To Outperform The Market

All investors are expected to understand that with high risk, comes high reward. The oil industry is shrouded in volatility, since most of the competitive sector has recently been dealt large losses. Nevertheless, this specific industry possesses numerous hidden gems that investors view as opportunities for massive capital gains.

Zacks customers have the ability to uncover these investments with our Premium Screening feature on our website. Even though the ultra-competitive oil industry has largely struggled recently, there are various stocks that still possess a positive outlook. These stocks are projected to provide investors with not only stability, but profitability.

These 5 oil company stocks are expected to outperform the market:

1. North American Energy Partners, Inc. (TO:NOA)

North American Energy is projected to explode given its “A” grade for Momentum and Growth. As of 60 days ago, the company’s full-year EPS Estimate increased by 150%. This means that North American Energy’s share price is expected to skyrocket while the company continues to steadily grow. Even though this company participates in a rather risky industry, the firm has a current beta rating of 0.51, which means that the stock is considered to be less volatile.

Also, North American Energy is anticipated to continue its success with a projected sales growth of 32.30% compared to the industrial average of 15.08%. North American Energy Partners currently sports an “A” VGM Style Score grade as well as a Zacks Rank #2 (Buy).

2. W&T Offshore, Inc. (NYSE:WTI)

W&T Offshore is set to surge, as they have beaten their earnings projections for the past eight operational quarters dating back to 2015. Further, its projected EPS Growth has ballooned up to 165.29%, which warrants the idea that the company is expected to drastically grow in the near future.

Also, W&T Offshore is outperforming its industrial competitors. W&T sports a P/E ratio of 2.42 and Earnings Yield of 38.16% compared to industrial averages of 11.93 and 1.37%, respectively. W&T is currently trading close to their 52 Week Low price. In essence, since the company received an “A” grade for Growth and a Zacks Rank #2 (Buy), now might be the optimal time to invest.

3. Tallgrass Energy GP, LP (NYSE:TEGP)

Tallgrass Energy is projected to reward its shareholders in the near future. The company has received an “A” grade for Momentum and defeated their earnings projections during the last two quarters by an average of 26.34%. Additionally, Tallgrass Energy’s projected sales growth stands at 8.67% while in the past 60 days, their full-year EPS estimate has increased by 23.66% to $1.15.

Tallgrass Energy also sports an “A” Value grade which means that the company is most likely undervalued by the industry. This investment ought to provide strong value to a portfolio, as the firm’s Cash Flow per share is $2.04 compared to an industrial average of $1.34. This means that Tallgrass Energy is utilizing shareholder equity in a more efficient manner than its competitors. Tallgrass Energy is a Zacks Rank #1 (Strong Buy).

4. Enbridge Energy, L.P. (NYSE:EEP)

Enbridge Energy, L.P. has received an “A” grade for Value on our Style Score system while the firm pays a strong 9.30% dividend to its shareholders. Enbridge Energy’s earnings surprise history is impressive, as it surpassed the Zacks Consensus Estimate in three of the last four quarters by an average of 38.22%. Further, projected EPS growth stands at 21.77% compared to their competitor’s average of 16.60%.

Additionally, the company has engaged itself in a $28 billion worth capital project program in which most of the developments have yet to begin service. This capital project is expected to produce major positive cash flows which in turn would be extremely beneficial to shareholders. Enbridge Energy sports a Zacks Rank #1 (Strong Buy).

5. Seadrill Partners LLC (NYSE:SDLP)

Seadrill Partners is on a streak of beating their earnings projections for the past four operational quarters by an average of 51.34% including their most recent quarter’s surprise of 134.38%. Seadrill believes in rewarding their shareholders by paying an astronomical dividend of 13.07%. The company posted impressive measurements that compare favorably to the industry, like an 11.52% RoE, $7.57 Cash Flow per share and 13.54% Earnings Yield.

Additionally, Seadrill’s Net Margin of 20.33% towers over the industry average. In essence, Seadrill Partners is retaining significantly more of their sales and revenue than their competitors. Seadrill Partners touts an “A” VGM grade from our Style Score system and has a Zacks Rank #2 (Buy).

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