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10 Low-Beta Energy Stocks With Upside

NEW YORK ( TheStreet) -- Western Gas Partners (WES - Get Report), Williams Partners (WPZ), YPF SA (YPF - Get Report), Trina Solar (TSL - Get Report), Petroleo Brasileiro (PBR - Get Report), BreitBurn Energy Partners (BBEP - Get Report), Enterprise Products Partners (EPD - Get Report), InterOil Corporation (IOC), El Paso Pipeline Partners (EPB) and Linn Energy (LINE) are energy stocks trading at a lower beta.

EIA projects global oil consumption to grow by 1.7 million barrels per day (b/d) in 2011, from 86.7 million b/d in 2010. The agency adds that world consumption could increase by 1.6 million b/d in 2012. At close Tuesday (June 7, 2011), WTI crude traded at $98.2 per barrel, while Brent crude settled at $116.2 per barrel.

These 10 energy stocks are trading at a lower beta compared to peers and are relatively safe plays in a volatile market. In addition, these stocks have 15% to 84% upside potential, based on analysts' average 12-month price targets.
10. Petroleo Brasileiro (PBR - Get Report) is an integrated Brazilian oil and gas company engaged in the exploration and production, refining, transportation, and marketing of gas and power.

Net income for the first quarter of 2011 was reported 42% higher than the same period in 2010, driven by a demand surge for oil products in the domestic market. Higher oil prices and volumes during the year delivered a positive impact on the company exploration and production segment. Concurrently, spiking oil prices pressured the downstream business.

At the end of the first quarter, the company's leverage declined to 17%, much lower than Petroleo's established limit of 35%.

Experts peg 2011 capex at around $30 billion to $35 billion, up from $27 billion in 2010. Majority of the 2010 investments were utilized for pre-salt projects.

According to Bloomberg, the adjusted beta for the past six months stands at 0.95. Analysts' consensus estimate projects average gains at 45% over the next one year. The stock is trading at 8.5 times its estimated 2011 earnings.
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BBEP $2.02 0.00%
EPD $25.64 0.00%
PBR $4.93 0.00%
TSL $9.70 0.00%
YPF $18.21 0.00%


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