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EOG Resources vs. Pioneer Natural Resources : Which Oil & Gas Stock is a Better Buy?

EOG Resources (EOG) and Pioneer Natural Resources Co. (PXD) are two of the top energy stocks. Both have dipped in recent weeks but have considerable upside if oil's bull market continues. Patrick Ryan breaks down which is the better buy?

Oil and gas stocks have had a stunning turnaround over the last 15 months. Due to the pandemic leading to a collapse in demand, the front-month contract actually went negative.

Today, it's a different picture with oil at multiyear highs. Oil and gas stocks have had nice rallies, yet they've underperformed the commodities which is unusual and a sign that investors don't believe that energy has begun a new bull market.

Below, we provide a look at two of the more intriguing oil and gas stocks: EOG Resources (EOG) and Pioneer Natural Resources Co. (PXD).

EOG Resources (EOG)

Based in Houston, TX, EOG explores/produces oil and natural gas. EOG has operations in the United States as well as Trinidad and China.

EOG has a forward P/E ratio of 13.16. This is a comparably low ratio, meaning EOG is arguably underpriced at $83 per share. EOG has a 52-week high of $87.99 and a 52-week low of $31.22. EOG's beta of 2.17 indicates the stock has the potential to significantly decline or spike should the market become volatile.

EOG has a B POWR Rating. This means the stock is a Buy. EOG has an A grade in the Momentum component along with Bs in the Quality, Sentiment, and Growth components. Click here to find out how EOG fares in the rest of the POWR Ratings components such as Stability and Value.

EOG is ranked 20th of 95 stocks in the Energy - Oil & Gas industry. You can find out more about this industry by clicking here.

The analysts are believers in EOG, setting an average target price of $97.31 for the stock. If EOG hits this price point, it will have increased by nearly 22%. The highest analyst price target for EOG is $119. The lowest analyst target price for the stock is $73. EOG's average analyst price target has increased by $18.66 across the prior 105 days. In the past 13 months, the stock's average upside potential has been an impressive 25.81%.

Pioneer Natural Resources (PXD)

PXD produces natural gas, natural gas liquid, and oil. The company has operations in the most prolific basin in the southwest known as the Permian.

PXD is a Hold based on its POWR Rating grade of C. The stock is ranked in the bottom half of the publicly traded companies in the Energy - Oil & Gas sector, slotting in at 51 of 95 stocks. You can learn more about the stocks in this space by clicking here.

PXD has an A Momentum grade along with Bs in the Sentiment and Growth components. Investors who want to learn more about how PXD fares in the rest of the POWR Ratings components such as Quality, Value, and Stability can do so by clicking here.

PXD has a reasonable beta of 1.93 so it probably won't significantly fluctuate if the market makes a major move. PXD has a forward P/E ratio of 13.10. This is a tolerable ratio that indicates the stock is on the border between being fairly valued and slightly undervalued. PXD is currently trading at $157 per share. The stock's 52-week high is $175.37. PXD has a 52-week low of $76.58.

The analysts insist PXD will move higher, establishing an average target price of $208.27. If the stock hits this level, it will have increased by more than 32%. The highest target price for the stock is $259. The lowest target price for PXD is $172. PXD's upside potential has been more than 23% in the past 13 months. A total of 34 analysts have issued PXD recommendations. Exactly 10 of these analysts view the stock as a Strong Buy, 17 view it as a Buy, and seven view it as a Hold.

Which is the Better Buy?

EOG is the better of these two oil and gas stocks as it has a better POWR Rating grade. Establish a position in EOG, hold the stock through the "return to normal" and reassess your position toward the end of the year.

EOG shares were trading at $75.87 per share on Friday morning, down $0.32 (-0.42%). Year-to-date, EOG has gained 56.72%, versus a 17.12% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.


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