10Y annualized return is
positive but below market average
at 1.4% per year
EOG has met or exceeded earnings expectations in
all
recent quarters (2/2)
Attractive PE Ratio
Low EV/EBITDA Ratio
Strong Profit Margins
High Return on Equity
Strong Liquidity Ratios
Low Debt Levels
💰 Strong Financial Performance
📈 High Free Cash Flow Generation
🌍 Diverse Resource Portfolio
🚀 Growth in Emerging Plays
🌱 Strategic International Expansion
📊 Optimized Capital Investment
Price to Sales Ratio
⚠️ Higher Cash Taxes Impacting Free Cash Flow
EOG Resources demonstrates strong business quality through exceptional financial performance, high free cash flow generation, and a diverse resource portfolio. The company's future prospects are bolstered by growth in emerging plays and strategic international expansions, although higher cash taxes may present challenges in the near term.
Analysis Date: February 28, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
EOG Resources, Inc. is a company that finds and produces oil and natural gas, which are important sources of energy. They mainly operate in places like Texas and New Mexico in the United States, as well as in Trinidad and Tobago. Essentially, EOG digs deep into the ground to extract these resources and then sells them to help power homes, businesses, and vehicles. They play a key role in the energy industry by providing the fuel that many people use every day.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$435.54
Current Market Price: $108.19
IV/P Ratio: 4.03x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
75.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for EOG
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (9.77)
P/B ratio ≤ 1.5 (2.13)
Current ratio ≥ 2.0 (2.10x)
Long-term debt < Net current assets (0.72x)
Margin of safety (75.0%)
EOG does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
21.94%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
62.89%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
27.33%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
EOG showcases excellent profit margins with a net profit margin of 27.33%, indicating effective cost management and high profitability.
The return on equity (ROE) of 21.94% reflects strong performance in generating profits from shareholders' equity.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.17x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.10x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
With a current ratio of 2.10 and a quick ratio of 1.91, EOG has a solid liquidity position, ensuring it can meet short-term obligations.
EOG's debt to equity ratio of 0.17 and debt to assets ratio of 0.11 indicate a conservative capital structure with low reliance on debt.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
EOG Resources reported an adjusted net income of $6.6 billion in 2024, achieving a 25% return on capital employed. The company has consistently outperformed its peers, with an average return on capital employed of 28% since COVID.
EOG returned 98% of its free cash flow to shareholders through dividends and share repurchases, showcasing a commitment to shareholder value. The company has a pristine balance sheet, which allows flexibility in future investments.
EOG holds over 10 billion barrels of oil equivalent in resource potential, which earns among the highest returns in the industry (55% average after-tax rate of return). The company has strong foundational assets in the Delaware Basin and Eagle Ford, along with emerging plays in South Texas and international ventures.
EOG plans to increase activity levels by 20% in emerging plays such as Utica and Dorado, enhancing production in lower-cost gas assets. This will position EOG to capitalize on future demand and improve overall profitability.
The new joint venture in Bahrain represents a potential for significant returns. EOG's long-standing operations in Trinidad also provide opportunities for high-return projects, further diversifying revenue sources.
EOG's disciplined capital plan for 2025, maintaining CapEx at $6.2 billion, aims for sustainable value creation while focusing on operational excellence and continuous improvement across assets.
EOG anticipates an increase in cash taxes in 2025 due to expiring AMTs, which may slightly reduce free cash flow generation compared to 2024.