It’s no secret that energy stocks have seen their share of ups and downs lately. But that doesn’t mean they’re not worth considering as part of your portfolio. One stock that’s currently in the spotlight is Diamondback Energy Inc. (NASDAQ: FANG). This stock has seen tremendous growth in the past few years and could be a great addition to any investor’s portfolio.
Diamondback Energy is an independent oil and gas exploration and production company based in Midland, Texas. Founded in 2007, the company has grown to become one of the largest producers of oil and natural gas in the United States. With over 400,000 net acres of land, Diamondback owns and operates approximately 100 different oil-producing wells in the Permian Basin region of Texas and New Mexico.
FANG stock has seen tremendous growth in recent years, with the share price more than doubling from its October 2018 low of $107.91 to its current level of $232.46 as of May 2021. This has been driven by a sharp increase in the company’s total production volume and a steady climb in the price of crude oil. The company’s production has increased by over 33% since 2017, driven by higher well productivity and the addition of new wells.
In addition to its production growth, Diamondback has also seen a recent increase in financial performance. The company had a fantastic fourth quarter of 2020, with total revenues rising 56% year-over-year, due in large part to higher crude oil prices. This helped propel the company to its highest quarterly earnings since 2014, with net income reaching $300 million.
Overall, FANG stock is a solid long-term investment, with an impressive growth story backed by strong financial performance. The stock currently trades at 19 times its estimated 2021 earnings, which is significantly below its five-year average of 22 times. Adding Diamondback Energy to your portfolio could prove to be a lucrative move in the years to come.
