EOG RESOURCES INC (NYSE:EOG) – A Strong Candidate for GARP Investors

EOG RESOURCES INC (NYSE:EOG) stands out as a compelling pick for investors seeking growth at a reasonable price (GARP). The company, an independent oil and gas producer, meets key criteria from Peter Lynch’s investment strategy, balancing solid growth, profitability, and financial health with an attractive valuation.

Why EOG Fits the GARP Approach

• Sustainable Growth: EOG has delivered an impressive 5-year average EPS growth of 18.45%, aligning with Lynch’s preference for companies growing at a sustainable pace (15-30%).
• Reasonable Valuation: With a PEG ratio of -0.80 (based on past earnings growth), the stock appears undervalued relative to its growth trajectory. The P/E ratio of 9.91 is also below both industry and S&P 500 averages.
• Strong Profitability: The company’s Return on Equity (20.59%) and Return on Invested Capital (15.33%) outperform most peers, reflecting efficient capital allocation.
• Healthy Balance Sheet: EOG maintains a low Debt/Equity ratio (0.12) and a solid Current Ratio (1.87), indicating financial stability and liquidity.

Fundamental Highlights

EOG’s fundamental analysis score of 6/10 reflects strengths in profitability and financial health, though growth expectations are modest. Key takeaways:

• Profitability: High margins (26.1% net, 34.8% operating) and consistent cash flow generation.
• Dividend: A 3.55% yield with a history of growth, though sustainability depends on future earnings.
• Valuation: Priced below industry averages on P/E, EV/EBITDA, and P/FCF metrics.

For a deeper look, review the full fundamental report here.

Our Peter Lynch Strategy screener lists more stocks matching these criteria, updated daily.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.