Is EOG Stock A Bargain At $120?
GERMANY - 2024/04/03: In this photo illustration, an EOG Resources, Inc logo seen displayed on a ... More tablet. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
EOG Resources (NYSE: EOG) stock appears appealing at its present price of approximately $120, trading below its historical averages despite robust fundamentals. The company's stock dropped 4% in the last week, underperforming the S&P 500, which increased by 3%. Likewise, shares of Chevron Corporation (NYSE: CVX), Exxon Mobil (NYSE: XOM), and ConocoPhillips (NYSE: COP) each decreased by 4%, 5%, and 7%, respectively. As tensions in the Middle East subsided, oil-linked stocks lost some of their premium. Investors responded positively to indications of de-escalation, notably following a fragile ceasefire between Iran and Israel, which enhanced confidence that the Strait of Hormuz would remain open and alleviated concerns regarding supply disruptions. The outcome: Brent crude fell to approximately $67 per barrel, representing its lowest price in almost two weeks.
EOG Resources possesses a multi-basin, low-cost portfolio containing over 10 billion barrels of oil equivalent of accessible resources. In Q1, the company returned roughly $806 million to its shareholders through share buybacks—part of a consistent program that has decreased its share count by approximately 7% over the last three years—while sustaining a growing dividend trajectory. EOG's $5.6 billion acquisition of Encino Acquisition Partners significantly broadens its footprint in the Utica shale, expanding its net acreage to 1.1 million acres. The transaction is expected to enhance 2025 EBITDA by 10% and free cash flow by 9%. See Buy or Sell EOG Resources Stock?
That said, investors looking for upside with less volatility than a single stock, may want to consider the Trefis High Quality portfolio , which has routinely outperformed the S&P 500, achieving more than 90%total return since its launch in September 2020. It provides diversified exposure to strong companies with consistent performance, offering a smoother experience compared to the volatility driven by commodities in EOG.
How Does EOG Resources' Valuation Compare to The S&P 500?
Based on what you pay per dollar of sales or profit, EOG stock appears inexpensive when compared to the broader market.
• EOG Resources has a price-to-sales (P/S) ratio of 2.9 compared to a figure of 3.1 for the S&P 500
• Furthermore, the company's price-to-free cash flow (P/FCF) ratio is 12.4 in contrast to 20.9 for the S&P 500
• Additionally, it has a price-to-earnings (P/E) ratio of 11.2 against the benchmark's 26.9
How Have EOG Resources' Revenues Changed Over Recent Years?
EOG Resources' Revenues have seen a slight increase over recent years.
• EOG Resources has experienced its top line grow at an average rate of 3.0% over the last 3 years (compared to an increase of 5.5% for the S&P 500)
• Its revenues have diminished by 0.2% from $23 Billion to $23 Billion in the last 12 months (compared to growth of 5.5% for the S&P 500)
• Moreover, its quarterly revenues decreased by 7% to $5.7 Billion in the latest quarter from $5.9 Billion a year prior (compared to a 4.8% improvement for the S&P 500)
How profitable is EOG Resources?
EOG Resources' profit margins are significantly higher than most companies within the Trefis coverage universe.
• EOG Resources' Operating Income for the past four quarters was $8.3 Billion, representing a considerably high Operating Margin of 35.6%
• EOG Resources' Operating Cash Flow (OCF) during this period was $12 Billion, indicating a considerably high OCF Margin of 49.3% (compared to 14.9% for the S&P 500)
• For the last four-quarter period, EOG Resources' Net Income stood at $6.1 Billion – suggesting a considerably high Net Income Margin of 26.0% (compared to 11.6% for the S&P 500)
Is EOG Resources financially stable?
EOG Resources' balance sheet appears robust.
• EOG Resources' Debt stood at $4.7 Billion at the end of the most recent quarter, while its market capitalization is $69 Billion (as of 6/22/2025). This indicates a strong Debt-to-Equity Ratio of 6.8% (compared to 19.4% for the S&P 500). [Note: A low Debt-to-Equity Ratio is preferable]
• Cash (including cash equivalents) constitutes $6.6 Billion of the $47 Billion in Total Assets for EOG Resources. This results in a strong Cash-to-Assets Ratio of 14.0%
How resilient is EOG stock during a downturn?
EOG stock has performed significantly worse than the benchmark S&P 500 index during some recent downturns. While investors are hoping for a soft landing in the U.S. economy, how severe might the outcome be if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes.
• EOG stock decreased 34.8% from a high of $145.93 on 7 June 2022 to $95.12 on 14 July 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 7 November 2022
• Since then, the stock has risen to a high of $148.26 on 8 November 2022 and is currently trading at around $120
• EOG stock dropped 66.7% from a high of $89.29 on 7 January 2020 to $29.76 on 18 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 8 October 2021
• EOG stock fell 68.2% from a high of $71.70 on 20 May 2008 to $22.80 on 2 March 2009, compared to a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 11 July 2013
Putting It All Together: Implications for EOG Stock
In conclusion, EOG Resources' performance across the aforementioned parameters can be summarized as follows:
• Growth: Neutral
• Profitability: Extremely Strong
• Financial Stability: Very Strong
• Downturn Resilience: Very Weak
• Overall: Strong
Together with its very low valuation, this positions the stock as attractive and a good buy at the current price.
While EOG stock seems promising, investing in a single stock can carry risks. You might want to consider the Trefis Reinforced Value (RV) Portfolio, which has exceeded its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to generate strong returns for investors. Why is this the case? The quarterly rebalanced mixture of large-, mid-, and small-cap RV Portfolio stocks offers a responsive approach to capitalize on favorable market conditions while minimizing losses when markets decline, as explained in RV Portfolio performance metrics.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
Mastercard Incorporated (MA): 'This Is Your Chance' To Buy, Says Jim Cramer
Mastercard Incorporated (NYSE:MA) is one of the . Mastercard Incorporated (NYSE:MA), like its larger peer Visa, has faced a roller-coaster ride on the stock market this year. The firm's shares have gained 4% year-to-date as it navigates through one selloff after another. Mastercard Incorporated (NYSE:MA)'s shares sank by 12% in April after Liberation Day tariffs created worries about economic stability in America. Then, after it slowly regained the lost ground, the stock tumbled by 9.6% in June after the Senate passed legislation related to stablecoins and created worries about market share loss. Here is what Cramer said: 'We've gotta keep going on this. . .Mastercard. Because a lot of our viewers think that these companies are really at risk. I actually think this is your chance to buy them. They're always at risk and they always win.' A woman using a payment terminal at the checkout of a store showing payment products and solutions. Earlier the year, Cramer advised viewers to consider fintech bottoms when evaluating Mastercard Incorporated (NYSE:MA): 'Watch fintech. Fintech bottoms before actual fin. Fintech is like the best place to be, you know Mastercard is a travel, travel related company. I would watch that. I would watch Visa. Another travel related company. Because those have been part of the cohort. If they can overcome travel and the Affirms of the world can overcome the buy-now-pay-later, you're gonna see a rally. You will see a rally.' While we acknowledge the potential of MA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
an hour ago
- Yahoo
Start buying shares for £500? Here's how – and some reasons why!
One myth about the stock market is that it takes a lot of money for someone to start buying shares. In fact, it is possible to do so with just a few hundred pounds. I actually think there are good reasons to consider doing so. One is that it means someone can be in the market sooner, rather than waiting years or perhaps even decades before they have saved up a large tum to get going. From the perspective of a long-term investor, a longer timeframe can offer a potentially sizeable advantage. Most people make some beginner's mistakes in the market, realistically – and starting on a small scale can also mean that they are less costly. The 'why' may now be clearer – but what about the 'how'? To start buying shares requires a practical means of doing so. So a new investor should consider how to put the £500 into the market. There are lots of options when it comes to share-dealing accounts, Stocks and Shares ISAs, and trading apps. Each investor has their own circumstances and so it pays to make a considered choice. Learning how the stock market works in detail can take years. But upfront an investor ought at least to come to grips with important concepts, from valuing shares to managing risks. For example, even with £500 it is possible to diversify across different shares. There is a difference between a good business and a good investment, so just putting money into successful businesses is not necessarily a smart way to invest. That helps explain why I do not own shares like Apple or Nvidia at the moment. I regard both as solid businesses, but do not think their current share prices offer me a compelling investment opportunity. What sorts of shares do I think someone should consider when they want to start investing, then? One mistake many people make is being too greedy. I understand – people start buying shares because they want to build wealth. But, in the stock market as elsewhere in life, opportunities that look too good to be true usually are. Starting with a well-known, proven business at a decent price could be attractive. That is why I think new investors should consider baker Greggs (LSE: GRG). The business is easy to understand – indeed, many of us are quite familiar with it from shopping there. Greggs has a proven business model and it already benefits from economies of scale that I think could grow if it expands its footprint. There are lots of opportunities to do that, as the company itself has recognized. Customer demand is high and resilient. While the industry is not glamorous, Greggs makes money thanks to its strong brand, huge shop network, and unique twists on well-known products. But investors have been worrying about profitability, with risks like a weak economy hurting sales and higher employment costs eating into profits. The result is that it is 31% cheaper to buy a Greggs share today than it was a year ago. I see that as an opportunity. Indeed, I started buying Greggs shares for my portfolio in recent months. A 3.6% dividend yield is the icing on the cake. The post Start buying shares for £500? Here's how – and some reasons why! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has positions in Greggs Plc. The Motley Fool UK has recommended Apple, Greggs Plc, and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Bloomberg
2 hours ago
- Bloomberg
Powell and Lagarde Count Cost of Trump's Turbulence
The global economy's concussion from five months of Donald Trump's presidency is likely to feature when five of the world's leading central bank chiefs discuss monetary policy in public on Tuesday. From tariff-related trade ructions to oil-price gyrations caused by Middle East hostilities, the question of how to handle the fallout from White House decisions may loom large as Federal Reserve chief Jerome Powell speaks on a panel with peers from the euro zone, Japan, South Korea and the UK.
