Savvy mergers cut your energy-stock risk

Article Excerpt

Oil and gas prices have moved up lately. But the future direction of energy prices depends on a lot of things, particularly economic growth rates around the world in the wake of COVID-19. Meanwhile, though, well-established companies in the industry have taken advantage of the setback to pick up properties and employees who might be harder to find in more-prosperous times. These two top companies have also made key mergers and implemented strategies to prosper—and to continue paying dividends—even if energy prices drop. That adds an extra layer of safety and helps support their share prices. We see both these stocks as buys: CIMAREX ENERGY, $80.12, is a buy. The company (New York symbol XEC; TSINetwork Rating: Extra Risk) (www.cimarex.com; Shares outstanding: 102.8 million; Market cap: $7.7 billion; Dividend yield: 1.4%) produces and explores for natural gas and oil. Gas makes up 41% of the company’s output; the remaining 59% is oil. In the three months ended June 30, 2021, Cimarex produced an…