CIMAREX ENERGY $102.82 - New York symbol XEC

CIMAREX ENERGY $102.82 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 87.2 million; Market cap: $8.6 billion; Dividend yield: 0.6%) produces and explores for natural gas and oil. Gas makes up 50% of the company’s output.

Cimarex’s properties are mostly in the Wolfcamp shale area of the Permian Basin in Texas and New Mexico, as well as the Cana-Woodford shale region in western Oklahoma.

In the three months ended September 30, 2014, Cimarex’s production averaged 942.4 million cubic feet of natural gas equivalent a day, up 31.5% from 716.8 million cubic feet a year earlier.

Thanks to the higher production and increased gas prices, Cimarex’s cash flow per share jumped 34.7%, to $5.86 from $4.35. Its total debt of $1.5 billion is a reasonable 17.4% of its market cap.

The stock trades at 4.4 times the company’s annual cash flow of $23.44 share, based on the latest quarter. However, like Devon, that estimate will fall if oil prices remain low.

Cimarex is a buy.

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