Chord Energy (CHRD): A Top Debt-Free Mid-Cap Stock to Buy Now

In the ever-evolving landscape of the energy sector, finding a stock that combines financial stability, operational efficiency, and a commitment to shareholder value is akin to discovering a hidden gem. Chord Energy Corporation (CHRD) stands out as one such gem, a debt-free mid-cap stock that has been making waves with its impressive performance and strategic initiatives. Let's delve into the details that make CHORD Energy a top investment opportunity.



Strong Financial Metrics

Chord Energy's financial metrics paint a picture of a company that is not only debt-free but also financially robust. With a Price-to-Earnings (P/E) ratio of 8.25, significantly lower than the industry average of 11.30, CHRD appears to be undervalued. This undervaluation is further supported by its Price-to-Book (P/B) ratio of 1.50, which is lower than the industry average of 2.71. These metrics suggest that CHRD's stock price is relatively low compared to its book value, making it an attractive investment.

The Price-to-Sales (P/S) ratio of 1.96 and the Price-to-Cash Flow (P/CF) ratio of 4.89 also indicate that CHRD is undervalued based on its sales and cash flow. Over the past 52 weeks, CHRD's P/CF ratio has ranged from 2.70 to 5.01, with a median of 4.15, further supporting its undervaluation.

Recent Performance Highlights

Chord Energy's recent performance has been nothing short of impressive. The company reported strong operational and financial highlights for the fourth quarter of 2024, including oil volumes of 153.3 MBopd, which were above midpoint guidance, and total volumes of 273.5 MBoepd, exceeding the high-end of guidance. This strong performance was supported by solid execution and excellent well results, all while maintaining a focus on cost control.

The company's E&P and other CapEx of $330.3MM was below midpoint guidance, and Lease Operating Expense (LOE) of $9.60 per Boe was also below midpoint guidance. Net cash provided by operating activities was $566.5MM and net income was $210.6MM, with Adjusted EBITDA of $640.1MM and Adjusted Free Cash Flow of $276.9MM. These financial results demonstrate Chord Energy's ability to generate strong cash flow and maintain operational efficiency.

Shareholder Value

Chord Energy's commitment to returning value to shareholders is evident in its decision to return 100% of Adjusted Free Cash Flow to shareholders in the fourth quarter, with $205.0MM, or 73%, in the form of share repurchases. Since closing the Enerplus combination, Chord has repurchased 3.5MM shares of common stock through February 21, 2025, representing more than 5% of shares outstanding. This share repurchase program, along with the company's strong financial performance, positions Chord Energy as a top investment opportunity.



Operational Efficiency

Chord Energy's operational efficiency is evident in its strong well performance, with oil volumes of 153.3 MBopd above midpoint guidance. This reflects solid execution and excellent well results, all while maintaining a focus on cost control. The company's decision to increase the 4Q24 base dividend to $1.30 per share, representing an increase of 4%, further demonstrates its commitment to operational efficiency and shareholder value.

Conclusion

In conclusion, Chord Energy Corporation (CHRD) stands out as a top debt-free mid-cap stock to buy now. With strong financial metrics, impressive recent performance, a commitment to shareholder value, and operational efficiency, CHRD is well-positioned to outperform the market over the next twelve months. As the energy sector continues to evolve, Chord Energy's strategic initiatives and financial stability make it a compelling investment opportunity.