APACHE CORP. $89 (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 391.2 million; Market cap: $34.8 billion; Price-to-sales ratio: 2.0; Dividend yield: 0.8%; TSINetwork Rating: Average; www.apachecorp.com) produces oil and natural gas from properties in the U.S., Canada, the U.K., Australia, Egypt and Argentina. Gas accounts for 55% of its production, and oil supplies the remaining 45%.
Due to low natural gas prices, the company recently wrote down the value of its Canadian gas properties by $480 million. Without this charge, its earnings fell 34.9% in the three months ended June 30, 2012, to $821 million, or $2.07 a share. A year earlier, it earned $1.3 billion, or $3.22 a share. Revenue fell 8.4%, to $4.0 billion from $4.3 billion.
The company’s aggressive drilling program should let it reach its goal of increasing its production by 6% to 9% in 2012. The stock trades at a low 8.8 times the $10.08 a share that Apache will likely earn in 2012. The yearly dividend of $0.68 yields 0.8%.
Apache is a buy.
