Midcap Energy Stocks To Buy #5: Ultra Petroleum (UPL)
What a difference a few years can make. After getting killed by low natural gas prices, Ultra Petroleum (UPL) has bounced back with a vengeance. Yet more good times could be in store for the midcap energy stock.
First off, the cold winter and hot spring has increased power consumption across the U.S. That has depleted our natural gas storage reserves, boosting prices higher and higher. Since UPL is predominately a natural gas producer, those higher prices mean money in the bank.
At the same time, most of UPL’s current and future drilling programs are tied to oil. In fact, during the first quarter of this year, UPL managed to see a 145% year-over-year jump in oil production. That growing oil production — along with its higher price — helped drive earnings of 87 cents per share. A year ago, UPL only earned 38 cents.
Add in the oil growth and the rise in natural gas prices, and you have a recipe for great gains in the year ahead.
UPL stock trades for a forward P/E of just 8. That actually makes the midcap energy stock a cheaper bet than buying giant Exxon Mobil (XOM), and an easy pick for one of the best midcap energy stocks.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.