1 Energy Stock Under $35 to Buy Now

APA Corporation's shares have increased in value over the past year. The diversified and unhedged portfolio, strategic acquisitions, and continued energy demand seem to be driving the company's future growth. We think it would be wise to invest in this energy stock since it has a high yield. Read on to find out more...

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APA Corporation has a market cap of $10 billion. The company is based in the US, Egypt, and the UK. The company has gathering, processing, and transmission assets in West Texas.

High prices across all three product streams helped the diversified portfolio. Despite supply chain disruptions and overall cost environment, APA has been able to manage its spending categories. The company produced 385,000 barrels of oil equivalent per day in the second quarter.

The first discovery was made at Baja-1 in Block 53. 34 meters of net oil pay was found in a single interval with the Campanian in Baja-1.

The success at Baja marks the 6th oil discovery we have participated in. John J. Christmann, APA's CEO and President said, "This result confirms our geologic model for the Campanian in the area and helps to de-risk other prospects in the southern part of Blocks 53 and 58."

The company bought West Texas oil-production land for $505 million in the second quarter of this year. The acquired assets are expected to add between 12,000 and 14,000 barrels of oil equivalent per day through the remainder of the year.

APA's Board of Directors recently increased the company's dividends from 50 cents per share to $1 per share. November 22 is when the next quarter's 25 cents will be paid. The Broad of Directors authorized the purchase of more shares.

Over the last year, we have strengthened our balance sheet and committed to returning a minimum of 60 percent of free cash flow to our shareholders through dividends and stock purchases. John J. Christmann said that the long-term cash flow will comfortably support the step up in the base dividend payment.

APA has gained over 50% over the past year to close the last trading session at $32.87.

There are some things that could affect APA's performance in the coming months.

The financials are solid.

APA's total revenue increased in the second quarter of the fiscal year. The company's adjusted earnings before interest, taxes, depreciation and amortization increased by 93.6% year over year. The company's net income attributable to common stock was $926 million.

The company's net income per common share increased by 230.5% year-over-year. Cash inflows from operating activities increased from a year ago. Free cash flow increased to $814 million.

The analyst estimates are favorable.

APA's revenue for the third quarter is expected to come in at $2.57 billion, an increase of 55.5% from the year before. The current quarter's estimate of earnings per share is expected to grow. The company has beaten the revenue estimates in three of the last four quarters.

The company's revenue is expected to increase by 35.9% in the next fiscal year. The current year is expected to see a 139.5% increase in earnings.

It's high profitability.

APA has a gross profit margin of 70%, which is 77.6% higher than the industry average. The trailing-12-monthEBIT margin is 144.9% higher than the industry average. The stock's net income margin is higher than the industry average.

APA has a trailing-12-month levered FCF margin of 31.70% which is higher than the industry average. The stock has a trailing-12-month ROTC and ROTA of 43.53% and 23.82%, respectively. The asset turnover ratio is higher than the industry average.

The valuation is attractive.

APA is currently trading at 3.52x, lower than the industry average of 6.43x. The stock's EV/Sales multiple is lower than the industry average. Its EV/EBITDA ratio of 2.38 is lower than the industry average.

APA is currently trading at a lower price than the industry average. The stock has a price/cash flow multiple that is lower than the industry average.

There is a consensus rating and price target.

APA was rated by 14 Wall Street analysts and 10 of them rated it Buy. There is a median price target of $55.21 for the next 12 months. The lowest price target is $41.00 and the highest is $75.00.

The POWR ratings show promise.

APA's B rating is equivalent to a Buy in the POWR Ratings system. POWR ratings are calculated using 118 different factors and weighted to an optimal degree.

Each stock is evaluated based on eight different categories. APA has a grade of A for quality, which is in line with its profitability metrics. It has a B grade for Growth, which is in line with its revenue and earnings growth estimates.

APA is a stock in the Energy- Oil & Gas industry.

We have given APA grades for Sentiment, Value, Momentum, and Stability as well. All APA ratings can be accessed here.

The bottom line.

APA achieved top- and bottom-line results in the last quarter. The company has a diversified portfolio and a positive long-term outlook for energy demand. We think it would be a good idea to invest in this energy stock now.

APA Corporation stacks up against its peers.

APA has an overall POWR rating of B.

APA was trading at $33.03 per share on Monday, up $0.16 from the previous day. APA has gained more than the S&P 500 in the year to date.

Her interest in the stock market led to her becoming a financial journalist. She looks to help retail investors understand the underlying factors before they make investment decisions.

There is more.

The post was first published on Stock News.com.