CIMAREX ENERGY $116.31 - New York symbol XEC

CIMAREX ENERGY $116.31 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 87.7 million; Market cap: $10.1 billion; Dividend yield: 0.6%) produces and explores for natural gas and oil. Gas makes up 69% of the company’s output; the remaining 31% is oil.

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 March 31, 2015, Cimarex’s production averaged 946.7 million cubic feet of natural gas equivalent a day, up 27.9% from 740.4 million cubic feet a year earlier.

Despite the higher output, lower oil and gas prices cut the company’s cash flow per share by 54.5%, to $2.18 from $4.79. Its long-term debt of $1.5 billion is a low 14.9% of its market cap.

The stock trades at 13.3 times Cimarex’s annual cash flow of $8.72 share, based on the latest quarter. But as with Devon, that estimate will change along with oil and gas prices.

Cimarex is a buy.

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