Zacks.com releases the latest Analyst Interview. Today’s interview is with senior analyst Sheraz Mian, who discusses ExxonMobil (NYSE: XOM), ConocoPhillips (NYSE: COP), Marathon (NYSE: MRO) and Diamond Offshore (NYSE: DO).
A synopsis of today’s Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.
What are some of your top Buy recommendations?
The integrateds are a fairly interesting group of companies, in that they not only give you full exposure to the energy group as a whole – because they have their upstream and downstream businesses – but aside from the energy exposure, which in my view is so important for investors to have within the context of a diversified investment portfolio, these are also fairly defensive equities.
They have very strong cash flows. Balance sheets are in as pristine shape as they ever have been. They pay growing dividends of about 2-2½%. On the whole, they’re very disciplined with their capital outlays, so they buy back their own shares with excess capital, and keep a strong eye on returns.
So with these attributes, the integrateds really provide a good opportunity for investors to get exposure to the energy universe. And they are relatively less risky than some of the other equities in the group. I like ExxonMobil (NYSE: XOM), I like ConocoPhillips (NYSE: COP) – both pretty well-known names. I also like Marathon (NYSE: MRO), a large Midwest-based refiner, as well.
That’s kind of like the core of my conviction ideas in the group. I also like the offshore drillers, as well: companies like Diamond Offshore (NYSE: DO). They have a multi-year opportunity in the sector right now, so they are pretty well positioned, as well. In all of these names I listed, they look fairly attractive on valuation grounds as well, despite having some really strong run-ups in the last year or two.
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