BOSTON ( TheStreet) -- With crude oil approaching $90 a barrel, driven by the economic recovery and the weaker dollar, energy companies are racking up profits. Still, there are bargains in the sector. Here are the 10 cheapest oil and gas stocks in the S&P 500 Index, based on forward earnings. The S&P 500 sells for a forward earnings multiple over 14. These energy stocks are cheaper than that. Below, they are ordered from cheap to cheapest.
10. El Paso (EP) is a natural gas transmission, exploration and production company. Third-quarter profit more than doubled to $142 million, or 19 cents a share, as revenue grew 24%. The operating margin rose from 34% to 44%. El Paso's stock trades at a trailing earnings multiple of 11, a forward earnings multiple of 12, a book value multiple of 2.1 and a cash flow multiple of 5.3, 34%, 22%, 53% and 29% discounts to peer averages. Of analysts following the stock, 10 rate it "buy" and four rank it "hold." A median target of $15.64 suggests 16% upside in 12 months.
Bullish Scenario: BMO Capital Markets expects El Paso's stock to advance 26% to $17.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV