MENU

Is it time to buy Origin Energy Ltd?

The Origin Energy Ltd (ASX: ORG) share price has made a strong recovery since slumping to $7 in October and is now trading for about $9.57.

Despite gaining more than 35 per cent in the past three months, there are signs the Origin share price could keep going up.

For financial year (FY) 2017, Origin reported a net loss after tax of $2.2 billion on revenues of $14 billion.

More recently, things have been looking better for Origin.   

For the quarter ended 30 September 2017, Origin announced revenue of $678.6 million, up by 58 per cent on the corresponding period the year before.

Origin also entered into an agreement to sell its conventional upstream oil and gas business, Lattice Energy, to Beach Energy Ltd (ASX: BPT) for about $1.6 billion during that quarter.

Origin CEO Frank Calabria said the sale is part of the company’s strategy to simplify the business and reduce debt.

Adding to those factors, Origin looks set to benefit from rising retail energy prices coupled with projections of further declines in the costs of producing renewable energy.

As such, some analysts have changed their views on Origin.

In November, UBS cited Origin among its top ten ASX shares to buy for 2018 among another energy provider, AGL Energy Ltd (ASX: AGL).

Last month broker Goldman Sachs lifted its rating on Origin from neutral to buy, slapping a $10.70 target on the energy company’s share price.

And, more recently, another broker, Morgan Stanley, has lifted its price target on Origin shares to $10.88.

Although things are looking better for Origin, AGL Energy still looks like a better buy.

AGL is expecting to turn an underlying profit after tax of up to $1.04 billion for FY 2018, which would represent a significant improvement on FY2017’s profit of $802 million.

And AGL, unlike Origin, paid its shareholders a dividend per share of 91 cents (80 per cent franked) for FY 2017.

As such, AGL appears more attractive.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.