EOG Resources: Growth And Income Buy Alert

EOG Resources (EOG) recently reported adjusted non-GAAP earnings of $2.52 per share for the second quarter. The result topped last year’s $1.17 and exceeded Wall Street expectations by 11.5%. The natural gas and crude oil company also hiked its dividend by 12.5%.

Company Description

EOG Resources, Inc. is an independent (non-integrated) oil and natural gas company with proved reserves in the United States, Canada, Trinidad, the United Kingdom North Sea and China.

Growth in the Second Quarter

On July 29, the company reported adjusted non-GAAP earnings of $2.52 per share for the second quarter. The result topped last year’s $1.17 and exceeded Wall Street expectations by 11.5%.

EOG said its United States crude oil and condensate production increased 51% year-over-year, attributing the production jump to strong well results from the North Dakota Bakken and Mid Continent operating areas.

The company’s return on equity (ROE) of 23% stands above the industry average of 18%. Earnings per share are expected to grow by 15% over the next 3 – 5 years, which is in line with the industry average.

Higher Income

The company also hiked its dividend by 12.5%, which was the second boost in 2008. A dividend of 13.5 cents per share is payable on October 31, 2008 to holders of record as of October 17, 2008.

Forecasts Keep Moving Up

Thirteen out of 21 covering analysts have full-year 2008 earnings estimates pegged at $9.32 per share, an increase from last month’s $8.81. Three of those analysts bumped up their projection to $9.34. The most accurate forecast is even higher at $9.78.

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