A Look at 3 Energy Stocks – CTX, WOR, ORG

Three important energy sector stocks are Caltex Australia Limited (ASX: CTX), WorleyParsons Limited (ASX: WOR), and Origin Energy Limited (ASX: ORG). Let’s see how these companies are performing based on their recent updates.

Caltex Australia Limited

Caltex Australia Limited (ASX: CTX) has an engagement in the purchase, supply, refining, distribution and sale of petroleum products and the operation of convenience stores throughout Australia and the North Island of New Zealand under the Gull NZ brand. Today, on June 20, 2019, the stock of CTX tumbled by 13.454% post the company’s unaudited H1 FY19 profit guidance announcement. The company highlighted that the industry continues to experience difficult macroeconomic conditions arising from the slowing Australian economy, low refining margins and high crude prices, combined with a low FX rate. The replacement cost operating profit NPAT outlook for H1 FY19 has been expected to be at $120 million to $140 million, which is reasonable in the difficult economic environment. Fuels & Infrastructure (F&I) (excluding Lytton) EBIT is expected to be between $190 million to $200 million for H1 FY19 as compared to $209 million in H1 FY18. F&I (excluding Lytton) EBIT would have improved on the previous corresponding period if not for the ~$40 million negative EBIT impact from the repriced EG Group (Woolworths) fuel supply contract.

Lytton EBIT is expected to be in the range of $0 to $10 million in H1 FY19 as compared to $105 million in H1 FY18. Lytton EBIT in 1H 2019 was significantly impacted by ~US$2/bbl lower external refiner margins and the previously disclosed outages. Convenience Retail (CR) EBIT is expected in the ambit of $75 million to $85 million in H1 FY19 as compared to $161 million in H1 FY18. CR EBIT is expected to be ~50% lower than the previous corresponding period due to the impact of a significant increase in crude oil prices on industry fuel demand and margins, and competitive dynamics in the retail fuel market.

Unaudited Profit Guidance (Source: Company Reports)

On May 9, 2019, CTX published its First Quarter Trading update for the period ending March 2019.

On the stock information front, at market close (on June 20, 2019) the stock of Caltex Australia was trading at $23.400, down 13.269%, with a market capitalisation of $6.74 billion. Its current PE multiple stands at 12.550x, with EPS of $2.149. Its annual dividend yield is noted at 4.44%. Today, it reached day’s high at $23.650 and touched day’s low at $20.520, with a daily volume of 7,456,520. Its 52 weeks high price stands at $33.650 and 52 weeks low price at $20.520, with an average volume of 1,102,974 (yearly). Its absolute returns for the past one year, six months and three months are -13.30%, 6.05%, and -2.03%, respectively.

WorleyParsons Limited

WorleyParsons Limited (ASX: WOR) has an engagement in providing engineering design and project delivery services, including providing maintenance, reliability support services and advisory services for sectors such as Hydrocarbons, Minerals, Metals & Chemicals, and Infrastructure. The company recently announced the issuance of new 3,012 fully paid ordinary shares and 1,480,244 performance rights issued in accordance with the company’s performance rights plan effective from June 13, 2019.

H1 FY19 Key Highlights: The company’s aggregated revenues increased by 11.1% to $2,566.2 million, whereas its statutory revenues increased by 9.8% to $2,645.7 million. WOR’s underlying EBIT and NPAT increased by 17.6% to $156.3 million and 25.8% to $98.4 million, respectively. The statutory NPAT increased from $1.4 million to $82.4 million. The company is making progress towards completion and transition planning for the acquisition of Jacobs’ Energy’s Chemicals and Resources division. The Board of Directors resolved to pay an interim dividend of 12.5 cents per share. WOR’s operating cash flow decreased from $23.3 million to $21.0 million.

H1FY19 Financial Metrics (Source: Company Reports)

On the stock information front, at market close on June 20, 2019, the stock of WorleyParsons was trading at $14.350, up 1.701%, with a market capitalisation of $7.32 billion. Its current PE multiple is at 30.280x, with EPS of $0.466. Its annual dividend yield is noted at 1.95%. Today, it reached day’s high at $14.470 and touched day’s low at $13.970, with a daily volume of 2,214,671. Its 52 weeks high price stands at $20.028 and 52 weeks low price at $10.720, with an average volume of 1,571,790 (yearly). Its absolute returns for the past one year, six months, and three months are -11.27%, 24.10%, and -4.40%, respectively.

Origin Energy Limited

Origin Energy Limited (ASX: ORG) has an engagement in the exploration and production of natural gas along with electricity generation and the sale of liquified natural gas. The company’s credit rating was recently upgraded to BBB (stable) and Baa2 stable from BBB- (positive) as per S&P’s credit report and Baa3 (positive) as per Moody’s credit report, respectively. ORG’s retail segment is a simplified business centred around the customer, and by FY2021, it wishes to reduce its costs over $100 million. The company is also growing new revenue streams. In its energy supply segment, ORG aims to develop low cost renewables by targeting additional 530 MW contracted wind online by 2020. It also plans to develop a platform to connect millions of distributed assets. To achieve this, the company is developing leading digital and analytical capability and investing in technology for new customer solutions.

March ‘19 Quarter- Key Highlights: During the period, in the Integrated Gas segment, Australia Pacific LNG posted its highest-ever quarterly revenues of $763.9 million (Origin Share), which is an increase of 53% as compared to the March ‘18 Quarter. The company’s share of production was stable at 63 PJ (petajoules), supported by the fact that a total of 33 LNG (liquified natural gas) cargoes were loaded and shipped from Australia Pacific LNG.

March’19 Quarter Performance (Source: Company Reports)

On the stock information front, at market close on June 20, 2019, the stock of Origin Energy was trading at $7.260, up 3.125%, with a market capitalisation of $12.4 billion. Its current PE multiple is at 10.130x, with an EPS of $0.695. Its annual dividend yield is noted at 1.42%. Today, it reached day’s high at $7.280 and touched day’s low at $7.050, with a daily volume of 9,006,518. Its 52 weeks high price stands at $10.270 and 52 weeks low price at $6.030, with an average volume of 5,374,003 (yearly). Its absolute returns for the past one year, six months, and three months are -28.38%, 8.98%, and -5.38%, respectively.


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