The Plains All American Pipeline earnings report comes out today (Feb. 7) after the closing bell, but investors should ignore the noise and focus on the stock's long-term upside.
We think Plains All American Pipeline L.P. (NYSE: PAA) is one of the best oil stocks to buy this year. In fact, we see a scenario where PAA stock could jump 20% in 2017.
Plains All American Pipeline is a midstream oil company with pipelines connecting hubs all across North America.
We're going to show you why PAA stock is one of the top oil stocks in 2017 and why you shouldn't read too much into its earnings report today...
What to Expect in Plains All American Pipeline Earnings
Plains All American Pipeline stock currently trades at $32.15 a share and has exploded for 56% gains over the last year.
Trending: There Are Big Changes and Big Profits Coming to the Oil Sector in 2017
Analysts are expecting PAA earnings per share to come in at $0.47. Anything less than that could send the stock tumbling short term.
And PAA has missed its earnings estimates for three out of the last four quarters, going back to Q4 2015.
That could explain why PAA stock is down 0.25% today, ahead of its earnings release. Traders might be expecting PAA earnings to miss expectations yet again.
But if PAA misses earnings today, investors shouldn't worry. We think PAA is one of the best oil stocks to buy in 2017. Here's why we're bullish on PAA in 2017...
Why PAA Stock Is a Great Buy in 2017
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Rising oil prices are stimulating American oil production, and PAA is primed to benefit.
As American oil production rises, oil producers have more oil they need to transport to markets across the globe. PAA's pipelines help make that happen.
That's why analysts surveyed by Yahoo! Finance are predicting PAA's revenue to grow up to 84% in 2017.
Crude oil prices have climbed 12% since the OPEC agreement was announced on Nov. 30, and they could go even higher.
Money Morning Global Energy Strategist Dr. Kent Moors says oil prices could rise another 20% by Q2 in 2017.
And Plains All American Pipeline is gearing up to handle more oil. In 2016, PAA invested $15 billion to expand its pipelines as oil prices rise.
According to a Yahoo! Finance survey of 19 analysts, PAA is expected to improve its EPS by 52% in 2017, and some project its share price could grow 20% this year.
PAA is also paying a dividend yield of 6.88%, which is higher than leading oil major Royal Dutch Shell's yield of 6.86%. That added income is a nice perk for investors owning the stock.
Despite all the upside, the stock is still undervalued. Its price/earnings to growth (PEG) ratio is 0.93. A PEG ratio below 1 indicates a great value.
Plains All American Pipeline stock is only one of the ways to profit from rising oil prices in 2017. Moors says a "classic" energy play is making a comeback. Here's why this investment is roaring back in a big way...