Cabot Oil & Gas (COG) Stock Declines Along With Oil Prices

NEW YORK (TheStreet) -- Cabot Oil & Gas (COG) shares are down 0.18% to $34.11 in afternoon trading on Wednesday as the oil company suffers from falling crude prices.

Industry standard Brent crude for July delivery is down 2.47% to $63.87 per barrel, while West Texas crude for July delivery is also down 2.56% to $59.69 in trading today.

The fall in oil prices comes despite the fifth straight week of declining U.S. crude supplies in an already oversupplied market.

However, investors also have a negative view ahead of the Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna on Friday at which the cartel is expected to set its production policy for the next six months.

When OPEC last met in November the group agreed to keep production at 30 million barrels a day.

However, the International Energy Agency estimated that the cartel produced 31.2 million barrels per day in April, its highest output since 2012, according to USA Today.

TheStreet Ratings team rates CABOT OIL & GAS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CABOT OIL & GAS CORP (COG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has slightly increased to $267.38 million or 4.70% when compared to the same quarter last year. In addition, CABOT OIL & GAS CORP has also vastly surpassed the industry average cash flow growth rate of -53.17%.
  • The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.49 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for CABOT OIL & GAS CORP is rather high; currently it is at 62.93%. Regardless of COG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COG's net profit margin of 8.66% compares favorably to the industry average.
  • The share price of CABOT OIL & GAS CORP has not done very well: it is down 5.87% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CABOT OIL & GAS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: COG Ratings Report

More from Markets

Apple and GE Switch Roles; Musk's Super Control of Tesla Explained -- ICYMI

Apple and GE Switch Roles; Musk's Super Control of Tesla Explained -- ICYMI

Trump May Be More to Blame For Higher Oil Prices Than OPEC

Trump May Be More to Blame For Higher Oil Prices Than OPEC

Dow Falls Over 200 Points as Apple's Slump Offsets Gains in General Electric

Dow Falls Over 200 Points as Apple's Slump Offsets Gains in General Electric

Week Ahead: Major Earnings on Tap as Wall Street Readies for Geopolitical Moves

Week Ahead: Major Earnings on Tap as Wall Street Readies for Geopolitical Moves

3 Hot Reads From TheStreet's Top Premium Columnists

3 Hot Reads From TheStreet's Top Premium Columnists