Civitas ResourcesNYSE: CIVI

Civitas Resources is undervalued but with strong growth potential, driven by strategic acquisitions in key U.S. oil basins and a solid dividend strategy. Despite elevated debt levels, Civitas maintains a robust interest coverage ratio and continues to prioritize shareholder returns through dividends and stock buybacks. The company's commitment to sustainability and advanced drilling techniques positions it well for long-term growth in the competitive oil & gas sector.

Civitas Resources was formed in 2021 through a combination of companies with bankruptcy in the past. The company is managed conservatively financially. Acquisitions were made with a mix of stock and debt to keep the debt ratio at acceptable levels.

Civitas Resources, Inc. is a strong buy due to its aggressive M&A strategy, attractive valuation multiples, and substantial free cash yield. The company is leveraging its DJ and Permian Basin assets, focusing on cost reduction and production efficiency, with significant shareholder returns. Civitas Resources' hedging strategy ensures cash flow stability amidst commodity price fluctuations, aiding in rapid debt reduction and potential share buybacks.

24/7 Wall St. Insights After languishing for much of the summer, oil prices look to head higher.

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Civitas Resources (CIVI) came out with quarterly earnings of $2.06 per share, missing the Zacks Consensus Estimate of $2.93 per share. This compares to earnings of $1.72 per share a year ago.

Civitas is an exploration and production company with expertise in the acquisition as well as the production of crude oil and gas. I think that the company's growth in cash, PP&E, assets, and equity over the last decade indicates proven expertise. Competitors trade more expensively than CIVI, with analysts reporting a strong buy rating and a target price of $94, suggesting significant upside potential.

To me, it's a foreign concept that some investors steer clear of dividend stocks. Sure, they don't exactly have a reputation for being chart-toppers.

DENVER--(BUSINESS WIRE)--Civitas schedules second quarter 2024 conference call and webcast for August 2nd.