Estimates have rising for LINN Energy LLC (LINE) since the company delivered strong fourth quarter results.
Based on the current Zacks Consensus Estimate, net income per unit is expected to grow by 27% in 2011. The company also pays a distribution that yields an attractive 6.8%.
It is a Zacks #2 Rank (Buy) stock.
Company Description
LINN Energy LLC is an independent oil and gas development company. It is headquartered in Houston, Texas and has a market cap of $5.7 billion.
Fourth Quarter Results
Fourth quarter adjusted net income per unit came in at 43 cents, beating the Zacks Consensus Estimate by 3 cents. It was a 5% increase over the same quarter in 2009.
Average daily production surged 43% year-over-year while adjusted EBITDA from continuing operations, a good measure of the company’s cash flow, was up 55% year-over-year.
6.8% Yield
The company used this strong cash flow to pay a quarterly cash distribution of 66 cents per unit, or $2.64 on an annualized basis. This equates to a juicy 6.8% yield.
Estimates Rising
Analysts have been raising their estimates for LINN Energy over the last several months. The Zacks Consensus Estimate for 2011 is $1.95, representing 27% growth over 2010 EPS. The 2012 is currently $2.00, equating to 2% EPS growth.
It is a Zacks #2 Rank (Buy) stock.
The stock has soared more than 30% in the last 6 months.
Valuation is still reasonable, however, with shares trading at 19.6x forward earnings, a discount to the industry average of 22.4x. Its price to book ratio of 2.2 is also below the peer group multiple of 2.6.
Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.
LINN ENERGY LLC (LINE): Free Stock Analysis Report
Zacks Investment Research
