Estimates for Plains All American Pipeline, L.P. PAA have been revised upward over the past 60 days, reflecting analysts’ optimism in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings have moved up 7% and 8% to $1.52 and $1.88, respectively.

Plains All American Pipeline is a master limited partnership based in Houston, TX. It is involved in the transportation, storage, terminalling and marketing of crude oil, natural gas, natural gas liquids (NGL) and refined products in the United States and Canada.

Let’s discuss the factors that make Plains All American Pipeline an attractive pick.

Price Performance  

Year to date, units of Plains All American have gained 11.5% compared with the industry’s rise of 0.2%.


 

Growth Initiatives

The partnership is maintaining a systematic capital investment strategy to expand operations. The partnership projects 2018 capital expansion at $1.4 billion and aims to fund the capital expenditure through retained cash flow and targeted asset sales in 2018.

The partnership is expanding operations in the Permian Basin to capitalize on improving demand. More than 80% of itss planned capital expenditure for 2018 and 2019 is focused on this region.

Growth Projections

The Zacks Consensus Estimate for current-year earnings is pegged at $1.52, reflecting a year-over-year surge of 61.7%.

For 2019, the consensus estimate for earnings is pegged at $1.88, showing a rise of 23.7% year over year.

VGM Score

The stock carries an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Backtested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.

Zacks Rank & Other Key Picks

Plains All American Pipeline sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Investors can consider other top-ranked stocks from the same sector such as Devon Energy DVN, Murphy Oil Corporation MUR and Cheniere Energy, Inc LNG. Murphy Oil and Cheniere Energy sport a Zacks Rank #1. Devon Energy carries a Zacks Rank #2 (Buy).

Devon Energy delivered a positive earnings surprise of 5.26% in the last earnings report. Its 2018 estimates have surged 31.6% to $1.83 in the last 60 days.

Murphy Oil delivered a positive earnings surprise of 4.55% in the last earnings report. Its 2018 estimates have increased 34.4% to $1.64 in the last 60 days.

Cheniere Energy delivered a positive earnings surprise of 90.32% in the last earnings report. Its 2018 estimates have moved up 2.1% to $1.93 in the last 60 days.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we’re targeting>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Plains All American Pipeline, L.P. (PAA): Free Stock Analysis Report
 
Devon Energy Corporation (DVN): Free Stock Analysis Report
 
Cheniere Energy, Inc. (LNG): Free Stock Analysis Report
 
Murphy Oil Corporation (MUR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research