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EOG

EOG Resources NYSE:EOG Stock Report

Last Price

US$118.75

Market Cap

US$69.6b

7D

3.7%

1Y

84.2%

Updated

19 Aug, 2022

Data

Company Financials +
EOG fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance6/6
Financial Health5/6
Dividends5/6

EOG Stock Overview

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, and natural gas and natural gas liquids.

EOG Resources Competitors

Price History & Performance

Summary of all time highs, changes and price drops for EOG Resources
Historical stock prices
Current Share PriceUS$118.75
52 Week HighUS$147.99
52 Week LowUS$63.25
Beta1.61
1 Month Change12.49%
3 Month Change-2.70%
1 Year Change84.19%
3 Year Change65.51%
5 Year Change40.52%
Change since IPO3,797.44%

Recent News & Updates

Aug 16

EOG Resources: Thriving In An Energy Crisis

The U.S. enjoyed cheaper oil and gas than the rest of the world. Due to underinvestment in the E&P sectors, this could change quickly. The U.S. has three fields that make up a total of 52% of the U.S.'s total gas production. Production is reaching a natural limit and we see declining growth rates. You can't force the oil companies to ramp up their production when they're producing at capacity. Exploration and production requires capital and time. Deducing from our list of signs for a commodity cycle, all signs support our assumption that we're entering one and EOG could benefit greatly. EOG is trading conservatively as investors are still wary about E&P companies in general, all while EOG is reducing debts, being cash flow positive, and buying back shares. Thesis I remain structurally bullish on EOG Resources, Inc. (EOG). It has been a core part of my portfolio for the better part of two years. Lately, I've been asking if the natural gas and oil bull market has reached a peak, and after researching the market and history books, I conclude - I don't think so. After the oil boom and bust of 2008, the Exploration and Production (E&P) industry experienced a decade-long era of underinvestment combined with new ESG pressures, which made investing in the industry unattractive. E&P companies primarily work on existing wells and fields. Inflation remains high at 8.5% and is much stickier than people initially anticipated. Rising interest rates dampened demand, yet, energy prices remain high. Demand is declining, and we're likely entering a recessionary environment, yet, the U.S. could soon face an energy crisis. Energy Crisis in the U.S. Energy-wise, the U.S. has been in a privileged position compared to the rest of the developed world. The U.S. has vast oil and gas resources and is not dependent on energy imports. The U.S. is one of the world's largest energy consumers and producers. Oil and gas prices in the U.S. were safeguarded, and U.S. consumers thrived on their cheap energy prices. This could also be one reason that allowed investors and speculators in the U.S. to excessively speculate in the financial markets. The largest oil producers in the world (Visual Capitalist) U.S. citizens enjoyed cheaper oil and much cheaper natural gas than the rest of the world. The 2010s were an era of overinvestment in the E&P sector leading to the large fields like Marcellus and Haynesville coming online. This allowed the U.S. to switch from one of the largest importers (early 2000s) to the largest natural gas and LNG exporter. The price difference is remarkable. A barrel of oil has six times more energy content than an MMBtu (million British Thermal Unit) of natural gas. So the logical ratio between these two units should be 6:1. Before the major wells in the U.S. came online (~1990-2010), the ratio between oil and gas in the U.S. was 8:1. Since 2012, the ratio averaged 20:1 due to the production capabilities and trade surplus the U.S. experiences. Oil to Gas Ratio in the US (Bloomberg) Europe is currently paying ~$35 per MMBtu, the U.S. is paying $8.5 per MMBtu. Using the Brent Crude and WTI, the ratios are ~3 for Europe and ~11 for the U.S. The U.S. oil-to-gas ratio contracted slightly over the recent months. Shale Production in the U.S. The U.S. has been plagued by underinvestment in the exploration and production of new fields due to ESG mandates. The U.S. has three fields that make up a total of 52% of the U.S.'s total gas production. The Marcellus, Hayneville, and Permian Oil make up 52% of U.S. natural gas production, with 40% just from the first two. Marcellus and Haynesville ramped up natural gas production around 2010 from around 0 bcf/d to ~29bcf/d in Marcellus and 13 bcf/d in Haynesville. Hubbert Curve Before diving deeper into production, we discuss the Hubbert Curve. King Hubbert was a geologist that worked at shell oil. His theory is that the production of natural resources behaves like a bell curve. After an initial noisy production ramp-up, production would ramp quickly, plateau, and rapidly decline again. The Hubbert curve by Hubbert (1956) (Researchgate) Technological advancements distorted the curve over the last 50 years, so I wouldn't bet on production following it 1:1. Yet there are plenty of fields that followed the bell curve pattern. Barnett and Fayetteville experienced a productivity drop after reaching 60% of all Tier 1 locations drilled. Barnett and Fayetteville production - Hubbert Curve Model (Goehring Rozencwajg) We can use the Hubbert Curve as a rule of thumb when estimating the usable life of fields. The Hubbert Curve allows us to plot production capacity vs the cumulative production to create a Hubber Linearization. We won't go this far in this article. Back to the Shale Production in the U.S. Exploring new fields and bringing them online is coupled with high up-front investment and time. You can't just force the executives of oil corporations to ramp up their production when they're producing at capacity. The U.S. Energy Information Administration ("EIA") releases regular drilling productivity reports. This allows us to look at the productivity of fields over time. Since the drought of the 2020 pandemic, E&P companies have increased the numbers of rigs in different regions, yet production quickly reached a peak and is now slowly decreasing. eia - Drill Productivity Report 2022 (eia) E&P company executives are not motivated to continue exploration and drilling as congress and investors send mixed signals. At the end of last year, congress grills oil executives about climate change. A few months later, congress grills the same oil executives about high oil prices and demands that they increase output. The problem I see here is that the natural gas supply decreases rapidly, and the U.S. could lose its trade surplus, which has been defending it from international prices. Over the next year or two, without further investment in E&P, even with an ongoing recession, the U.S. could be forced to start importing natural gas, immediately setting its price equal to the international one. That's could lead to a 300-400% increase in natural gas prices in the U.S. E&P IPO and Secondary Fundraising (12-month MVA) (Goehring & Rozencwajg) Money is barely flowing into the E&P IPO and secondary fundraising market, which is understandable. This could keep the market for natural gas very tight in the U.S., which is in turn very profitable for oil and gas producers in the U.S. The Commodity Super-Cycle Commodities and the stock market work in cycles. I discussed it in more detail in an article I published last year in November. I urge the reader to take a look at the article - Anything With Demand is an Inflation Hedge. Looking at the history of financial markets, we can see how commodities and financials work in cycles. There are deflationary periods in which stocks outperform and inflationary periods in which commodities outperform. S&P 500 / Producer Price Index (log) (Longtermtrends) Deducing from the chart and what happened around those times, we can extract signs for a commodity cycle. Commodity cycles occur in inflationary periods - meaning they were preceded by money printing in some form. Commodity cycles are preceded by periods of underinvestment in commodities. The stock market was surging before a commodity cycle. Large monetary changes occurred during the largest commodity super cycles. We can check each list entry for the signs of an upcoming commodity cycle. EOG Resources EOG Resources is well-positioned within a possible commodity bull cycle. The last commodity bull cycle was characterized by negligence, where tons of debt was raised without consideration of the company's cash flow. The bubble in crude oil, natural gas, and other commodities destroyed 100s of billions in capital. All while E&P companies continued to raise debt to finance their business. EOG put negligence aside and practiced discipline for the better part of a decade. It consistently reduced its debt levels, improved its cash flow and profitability, and returned excess cash to investors. EOG Total Long Term Debt (Quarterly) data by YCharts EOG has been free cash flow positive since 2018 and reduced debt levels by ~40%. Valuation-wise, EOG is trading conservatively as investors are still wary about E&P companies in general. I've posted a chart above showing that E&P investments are at an all-time low. In my previous article mentioned above, you'll find more charts supporting the statement. Fastgraphs EOG - Operating Cash Flow (Fastgraphs) EOG has been part of my low-volatility portfolio which I regularly update on Google sheets. Feel free to take a look at my portfolio! The commodity part of my portfolio has exploded since 2020 and, even during the downturn in 2022, remained net ((VERY)) positive. EOG produces oil and natural gas. As I've discussed earlier in this article, I'm bullish on both commodities but see problems with the U.S.'s natural gas supply over the next 1-2 years. EOG Resources - Revenue Composition - June 2022 (EOG Quarterly Reports) If the downward trend in natural gas production growth continues, we could see EOG's revenue from natural gas and liquids rise disproportionately faster than revenues from oil. On the oil side of things, it's not much better. Even with the U.S. government releasing supply from the strategic petroleum reserve - SPR - to soften oil prices, the effects were mostly short-term. The chart below shows the rate of change in the SPR drawdown. It increased the drawdown to nearly 1.5% in May-June, which helped alleviate some of the pricing pressure on oil. WTI vs Drawdown Strategic Petroleum Reserve (US Energy Information Administration)

Shareholder Returns

EOGUS Oil and GasUS Market
7D3.7%2.3%1.4%
1Y84.2%73.4%-8.4%

Return vs Industry: EOG exceeded the US Oil and Gas industry which returned 73.4% over the past year.

Return vs Market: EOG exceeded the US Market which returned -8.4% over the past year.

Price Volatility

Is EOG's price volatile compared to industry and market?
EOG volatility
EOG Average Weekly Movement7.6%
Oil and Gas Industry Average Movement8.9%
Market Average Movement7.6%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.1%

Stable Share Price: EOG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: EOG's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19852,800Ezra Yacobhttps://www.eogresources.com

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, and natural gas and natural gas liquids. Its principal producing areas are in New Mexico and Texas in the United States; and the Republic of Trinidad and Tobago. As of December 31, 2021, it had total estimated net proved reserves of 3,747 million barrels of oil equivalent, including 1,548 million barrels (MMBbl) of crude oil and condensate reserves; 829 MMBbl of natural gas liquid reserves; and 8,222 billion cubic feet of natural gas reserves.

EOG Resources Fundamentals Summary

How do EOG Resources's earnings and revenue compare to its market cap?
EOG fundamental statistics
Market CapUS$69.59b
Earnings (TTM)US$5.71b
Revenue (TTM)US$26.66b

12.2x

P/E Ratio

2.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
EOG income statement (TTM)
RevenueUS$26.66b
Cost of RevenueUS$8.51b
Gross ProfitUS$18.15b
Other ExpensesUS$12.44b
EarningsUS$5.71b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)9.74
Gross Margin68.08%
Net Profit Margin21.41%
Debt/Equity Ratio22.8%

How did EOG perform over the long term?

See historical performance and comparison

Dividends

2.5%

Current Dividend Yield

27%

Payout Ratio

Does EOG pay a reliable dividends?

See EOG dividend history and benchmarks
When do you need to buy EOG by to receive an upcoming dividend?
EOG Resources dividend dates
Ex Dividend DateSep 14 2022
Dividend Pay DateSep 29 2022
Days until Ex dividend25 days
Days until Dividend pay date40 days

Does EOG pay a reliable dividends?

See EOG dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is EOG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for EOG?

Other financial metrics that can be useful for relative valuation.

EOG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.7x
Enterprise Value/EBITDA6.3x
PEG Ratio-5.4x

Price to Earnings Ratio vs Peers

How does EOG's PE Ratio compare to its peers?

EOG PE Ratio vs Peers
The above table shows the PE ratio for EOG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average12.7x
HES Hess
24.6x4.6%US$36.0b
PXD Pioneer Natural Resources
9.3x-14.2%US$57.7b
COP ConocoPhillips
8.4x-22.7%US$133.5b
DVN Devon Energy
8.5x-8.3%US$44.5b
EOG EOG Resources
12.2x-2.3%US$69.7b

Price-To-Earnings vs Peers: EOG is good value based on its Price-To-Earnings Ratio (12.2x) compared to the peer average (12.7x).


Price to Earnings Ratio vs Industry

How does EOG's PE Ratio compare vs other companies in the US Oil and Gas Industry?

Price-To-Earnings vs Industry: EOG is expensive based on its Price-To-Earnings Ratio (12.2x) compared to the US Oil and Gas industry average (10.1x)


Price to Earnings Ratio vs Fair Ratio

What is EOG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

EOG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio12.2x
Fair PE Ratio17.7x

Price-To-Earnings vs Fair Ratio: EOG is good value based on its Price-To-Earnings Ratio (12.2x) compared to the estimated Fair Price-To-Earnings Ratio (17.7x).


Share Price vs Fair Value

What is the Fair Price of EOG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: EOG ($118.75) is trading below our estimate of fair value ($222.37)

Significantly Below Fair Value: EOG is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is EOG Resources forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-2.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EOG's earnings are forecast to decline over the next 3 years (-2.3% per year).

Earnings vs Market: EOG's earnings are forecast to decline over the next 3 years (-2.3% per year).

High Growth Earnings: EOG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: EOG's revenue is expected to decline over the next 3 years (-2.4% per year).

High Growth Revenue: EOG's revenue is forecast to decline over the next 3 years (-2.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EOG's Return on Equity is forecast to be high in 3 years time (20.7%)


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Past Performance

How has EOG Resources performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


8.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: EOG has high quality earnings.

Growing Profit Margin: EOG's current net profit margins (21.4%) are higher than last year (13.6%).


Past Earnings Growth Analysis

Earnings Trend: EOG has become profitable over the past 5 years, growing earnings by 8.8% per year.

Accelerating Growth: EOG's earnings growth over the past year (203.8%) exceeds its 5-year average (8.8% per year).

Earnings vs Industry: EOG earnings growth over the past year (203.8%) exceeded the Oil and Gas industry 184.6%.


Return on Equity

High ROE: EOG's Return on Equity (25.6%) is considered high.


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Financial Health

How is EOG Resources's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: EOG's short term assets ($8.2B) exceed its short term liabilities ($5.8B).

Long Term Liabilities: EOG's short term assets ($8.2B) do not cover its long term liabilities ($10.1B).


Debt to Equity History and Analysis

Debt Level: EOG's net debt to equity ratio (9%) is considered satisfactory.

Reducing Debt: EOG's debt to equity ratio has reduced from 49.3% to 22.8% over the past 5 years.

Debt Coverage: EOG's debt is well covered by operating cash flow (161.8%).

Interest Coverage: EOG's interest payments on its debt are well covered by EBIT (41.4x coverage).


Balance Sheet


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Dividend

What is EOG Resources's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


2.53%

Current Dividend Yield

Upcoming Dividend Payment

TodayAug 19 2022Ex Dividend DateSep 14 2022Dividend Pay DateSep 29 202215 days from Ex DividendBuy in the next 25 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: EOG's dividend (2.53%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: EOG's dividend (2.53%) is low compared to the top 25% of dividend payers in the US market (3.97%).


Stability and Growth of Payments

Stable Dividend: EOG's dividends per share have been stable in the past 10 years.

Growing Dividend: EOG's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (27.1%), EOG's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (45.1%), EOG's dividend payments are well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

5.2yrs

Average management tenure


CEO

Ezra Yacob (45 yo)

0.83yr

Tenure

US$9,752,887

Compensation

Mr. Ezra Y. Yacob serves as Chief Executive Officer and Director at EOG Resources, Inc. since October 01, 2021. He served as President at EOG Resources, Inc. since January 4, 2021 until September 2021. Mr....


CEO Compensation Analysis

Compensation vs Market: Ezra's total compensation ($USD9.75M) is about average for companies of similar size in the US market ($USD12.86M).

Compensation vs Earnings: Ezra's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: EOG's management team is seasoned and experienced (5.2 years average tenure).


Board Members

Experienced Board: EOG's board of directors are considered experienced (7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

EOG Resources, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: EOG Resources, Inc.
  • Ticker: EOG
  • Exchange: NYSE
  • Founded: 1985
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Implied Market Cap: US$69.593b
  • Shares outstanding: 586.04m
  • Website: https://www.eogresources.com

Number of Employees


Location

  • EOG Resources, Inc.
  • 1111 Bagby Street
  • Sky Lobby 2
  • Houston
  • Texas
  • 77002
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/19 00:00
End of Day Share Price2022/08/19 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.