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4 Overlooked U.S. Energy Stocks to Buy

By U.S. News & World Report

In spite of a U.S. stock market hovering near all-time highs, the energy sector is one area which has been notably left behind.

With the Standard & Poor’s 500 Energy index down 15.3 percent for the year, the energy sector has underperformed all other U.S. sectors so far this year. In fact, the decline has been so fierce that the energy sector aggregate price-earnings ratio is now just 14 — the second-lowest of all sectors.

The primary cause of this steep decline has been the oversupplied nature of the world oil markets with production exceeding demand in the short term. However, speculation and short-selling has also played a role. U.S. energy stocks may now have declined too far, too fast, resulting in some overlooked bargains that may be attractive to patient, long-term investors.

The screen. We used the Recognia Strategy Builder to search for large-capitalization U.S. energy stocks looking well-valued due to recent declines.

[See: The Best Energy Stocks to Buy for 2017.]

We began by setting a minimum market cap threshold of $5 billion to focus on larger, more established companies in the sector. Next, to find refining stocks that appear to be well valued in today’s market, we filtered for a forward P/E ratio of 25 or less. Forward P/E uses analyst projections of future earnings rather than historical data.

To focus on energy stocks with efficient operations, we also filtered for companies with operating margins of 20 percent or more. Operating margin indicates how much profit the company makes on each dollar of revenue. A higher operating margin means that a company is more efficient at turning revenue into profits and has some buffer in the event that oil prices decline further.

With U.S. interest rates on the rise, we also want to avoid companies that are carrying a lot of debt on their balance sheet. We screened for companies with debt-equity ratios of 2.5 or less.

Last, we filtered to select only companies rated “buy” or “strong buy” by the consensus of industry analysts. Here’s what we found.

[See: 7 Ways to Tell if a Stock Is a Good Price.]

Diamondback Energy (ticker: FANG). Diamondback Energy is a Midland, Texas-based oil and gas company focused on production in Texas’ Permian Basin area. Year to date, the stock is down 17 percent, almost all of that coming in the past three months. In early May, the company announced first-quarter results which handily beat analyst estimates for both revenue and earnings. The company also has a debt-equity ratio of 0.21, which is at the low end of what is typical in the industry.

Newfield Exploration Co. (NFX). Newfield is an unconventional oil and natural gas producer focusing on production areas in Oklahoma, North Dakota and Utah. After declining 36 percent this year, NFX stock now has an extremely low forward P/E of 12.9 and operating margin of 20.6 percent.

Cimarex Energy Co. (XEC). Denver-based Cimarex has very efficient operations in Texas, Oklahoma and New Mexico resulting in a strong operating margin of 32 percent. In spite of beating analyst estimates for the last two quarters, the stock has been punished by investors and is down 33 percent for the year. Cimarex expects to grow production by 17 percent in 2017, setting it up for strong earnings in 2018 should oil prices reverse and move higher.

Devon Energy Corp. (DVN). Devon is a Fortune 500 company and the largest company on our list with a market cap of just more than $16 billion. Devon has an accelerating capital investment program and plans to grow production 13 to 17 percent this year and 20 percent next year. The majority of analysts are optimistic on the company, resulting in a consensus analyst rating of “buy.”

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Recognia Inc. in respect of the investment in financial instruments. Investors should conduct further research before investing.

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4 Overlooked U.S. Energy Stocks to Buy originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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