We recently compiled a list of the 12 Best Stocks to Own for Grandchildren. SM Energy Company is one of them. SM Energy Company (NYSE:SM), a Denver-based independent energy producer, is strengthening its position as a leading player in U.S. oil and gas through strong operational execution and disciplined financial management. With core operations in the Permian and Uinta Basins, the company continues to expand production while advancing its ESG commitments. In September 2025, SM declared a quarterly cash ...

Core Viewpoint - SM Energy Company is recognized as one of the best high-yield stocks to buy in October, highlighting its stability and dividend appeal [1]. Group 1: Company Overview - SM Energy Company (NYSE:SM) is an oil and gas exploration and production firm focused on U.S. oil and natural gas, primarily operating in the Midland Basin and South Texas, with additional assets in Utah's Uinta Basin [2]. - The company's growth strategy is centered on high-quality, production growth, and cash flow accretive assets [2]. Group 2: Recent Developments - Recently, SM Energy has concentrated on developing its Uinta Basin assets, enhancing production efficiency, and improving its balance sheet [3]. - The company emphasizes operational excellence, maintaining a strong portfolio of assets, financial discipline, and risk management strategies, including hedging and cost control [3]. Group 3: Financial Performance - On September 25, SM Energy announced a quarterly dividend of $0.20 per share, consistent with its historical performance of never missing a dividend payment in the past three decades [4]. - As of September 27, the stock has a dividend yield of 2.90% [4].

Core Viewpoint - SM Energy's stock has recently underperformed compared to major indices, with a notable decline of 6.16% in the latest trading session, while the broader market showed gains [1] Financial Performance - The upcoming earnings report is anticipated to show an EPS of $1.37, reflecting a decrease of 15.43% year-over-year, while revenue is expected to reach $850.96 million, indicating a significant increase of 32.22% from the same quarter last year [2] - For the entire year, earnings are forecasted at $5.82 per share, down 14.41% from the previous year, with revenue projected at $3.33 billion, representing a growth of 23.89% [3] Analyst Forecasts - Recent revisions to analyst forecasts for SM Energy are crucial, as they often indicate short-term business trends, with positive revisions suggesting a favorable business outlook [4] - The Zacks Rank system, which evaluates estimate changes, indicates that SM Energy currently holds a rank of 3 (Hold), with no changes in the EPS estimate over the last 30 days [6] Valuation Metrics - SM Energy's Forward P/E ratio stands at 4.74, significantly lower than the industry average of 11.2, suggesting a valuation discount [7] - The Oil and Gas - Exploration and Production - United States industry, to which SM Energy belongs, ranks in the bottom 22% of over 250 industries according to the Zacks Industry Rank [7][8]

Group 1 - The article promotes a free two-week trial for the investment group Distressed Value Investing, which provides exclusive research on various companies and investment opportunities [1] - Aaron Chow, known as Elephant Analytics, has over 15 years of analytical experience and is recognized as a top-rated analyst on TipRanks [2] - The investment group focuses on value opportunities and distressed plays, particularly in the energy sector [2] Group 2 - The article mentions that Aaron Chow co-founded a mobile gaming company, Absolute Games, which was acquired by PENN Entertainment [2] - The in-game economic models designed by Aaron for two mobile apps have achieved over 30 million combined installs [2]

Group 1 - The article promotes a free two-week trial for the investment group Distressed Value Investing, which provides exclusive research on various companies and investment opportunities [1] - The author, Aaron Chow, has over 15 years of analytical experience and co-founded a mobile gaming company that was acquired by PENN Entertainment, indicating a strong background in the gaming and entertainment sectors [2] - Distressed Value Investing focuses on value opportunities and distressed plays, particularly in the energy sector, highlighting a specific investment strategy [2] Group 2 - The article emphasizes that past performance is not indicative of future results, which is a common disclaimer in investment communications [3] - It clarifies that no specific investment recommendations are being made, and the views expressed may not represent the entire platform's opinions [3] - The article notes that the analysts contributing to the platform may not be licensed or certified, suggesting a diverse range of backgrounds among contributors [3]

Core Points - SM Energy's CEO Herbert S. Vogel will retire on March 1, 2026, and has resigned as President effective September 4, 2025 [1][2] - Elizabeth A. McDonald has been appointed as President and Chief Operating Officer, with plans to promote her to CEO upon Vogel's retirement [2][3] - Vogel's leadership is credited with significant portfolio expansion and bottom-line growth, emphasizing technology, innovation, and safety [3] - McDonald expressed excitement about the company's growth in reserves, production, and cash flow, supported by a strong balance sheet [3] Company Overview - SM Energy is an independent energy company focused on the acquisition, exploration, development, and production of crude oil, gas, and NGLs in Texas and Utah [5]

Company Overview - SM Energy is described as a premier operator of top-tier assets, focused on delivering sustainable returns of capital supported by a world-class technical team and a strong balance sheet [3][4]. Technical Expertise - The company differentiates itself from other exploration and production (E&P) companies through a returns-based technical focus, emphasizing the importance of technical expertise in its operations [4]. Future Outlook - The CFO of SM Energy, Wade Pursell, indicated that the presentation would focus on the future of the company, particularly regarding the ongoing Uinta integration deal [1][2].

Financial Data and Key Metrics Changes - Over the last five years, production has grown over 60%, oil production over 70%, and proved reserves over 60% without any dilution, maintaining total shares outstanding at 114 million [5][6][29] - The company's leverage decreased from 2.3 times to approximately 1 times during the same period, indicating a deleveraging strategy [6][29] Business Line Data and Key Metrics Changes - The company operates in three top-tier assets: Midland Basin, South Texas, and Uinta Basin, with significant production and reserve growth attributed to technical expertise [3][4][5] - In the Midland Basin, the number of wells drilled increased from a few to over 5,000, showcasing the success of the technical team's efforts [10][14] - The Austin Chalk in South Texas has shown improved performance, with returns comparable to the Permian Basin, and a significant inventory of 465 locations [12][13] Market Data and Key Metrics Changes - The Uinta Basin has been identified as a promising area with a 4,000 feet stack pay and potential for 17 intervals, with production profiles comparable to the Midland Basin [18][22] - Despite transportation costs, the margin per barrel of oil equivalent (BOE) in the Uinta Basin is nearly the same as that in the Midland Basin due to high oil content [22][23] Company Strategy and Development Direction - The company emphasizes a returns-based technical focus, aiming for capital-efficient growth without diluting shares or increasing leverage [6][34] - The strategy includes organic growth through technical expertise and potential acquisitions of top-tier assets that meet return criteria [17][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth and efficiency improvements, with plans to explore more of the Uinta Basin's upper cube and deep cube [39][40] - The company is cautious about macroeconomic uncertainties but remains optimistic about its cash flow generation and return of capital strategies [51][53] Other Important Information - The company has a strong balance sheet with a borrowing base of $2 billion, which is undrawn, and a cash position of $100 million at the end of the last quarter [26][27] - A fixed dividend has been increased from $0.15 to $0.20 per quarter, and a $500 million share buyback program is in place [31][32] Q&A Session Summary Question: What did the company see at the time of the Uinta Basin acquisition? - The technical team identified characteristics similar to the Permian Basin, including thick stack pay and high oil content, which justified the acquisition [35][36] Question: Does the company see potential for growth in the Uinta Basin? - The company is open to growth opportunities in the Uinta Basin but emphasizes that any new acquisitions must meet their returns-based criteria [42][43] Question: How does the company plan to allocate free cash flow moving forward? - As leverage approaches one times, the company will prioritize free cash flow towards share buybacks, while also considering the fixed dividend [50][51]

Financial Data and Key Metrics Changes - Over the last five years, the company has grown production by over 60%, oil production by over 70%, and proved reserves by over 60% without any dilution, maintaining total shares outstanding at 114 million [5][6][25] - The company's leverage has decreased from 2.3 times to approximately 1 times during the same period, indicating a deleveraging strategy [6][28] Business Line Data and Key Metrics Changes - The company operates in three top-tier assets: Midland Basin, South Texas (Austin Chalk), and Uinta Basin, all of which have shown significant production growth and technical advancements [3][12][20] - In the Midland Basin, the number of wells drilled has increased from a few to over 5,000, showcasing the success of the technical team's efforts [9][12] - The Austin Chalk has transitioned from a historically poor-performing area to one with returns comparable to the Permian Basin, with 465 locations identified [11][12] Market Data and Key Metrics Changes - The Uinta Basin has shown promising production profiles, with margins per barrel of oil equivalent (BOE) nearly matching those of the Midland Basin despite transportation costs [21][22] - The company has identified significant opportunities in the Uinta Basin, with a 4,000 feet stack pay and potential for 17 intervals, indicating a strong growth outlook [17][20] Company Strategy and Development Direction - The company emphasizes a returns-based technical focus, aiming to maintain capital efficiency and avoid dilution while growing production [3][6][32] - The strategy includes organic growth in existing assets and potential acquisitions of top-tier assets that meet their return criteria [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue generating returns through technical expertise and operational efficiencies [6][25] - The company is cautious about macroeconomic uncertainties but remains optimistic about its cash flow generation and return of capital programs [48][50] Other Important Information - The company has a strong balance sheet with a borrowing base of $3 billion, of which $2 billion is undrawn, and is currently in debt reduction mode [25][26] - A fixed dividend has been established, currently at $0.20 per quarter, with a share buyback program of $500 million in place [30][31] Q&A Session Summary Question: What did the company see at the time of the Uinta Basin acquisition? - The technical team identified characteristics similar to the Permian Basin, including thick stack pay and high oil content, which justified the acquisition [33][34] Question: Does the company see potential for growth in the Uinta Basin? - The company is open to growth opportunities in the Uinta Basin but emphasizes that any new acquisitions must meet their criteria for returns [39][40] Question: How does the company plan to allocate free cash flow moving forward? - As leverage approaches one times, the company will prioritize free cash flow towards share buybacks, while also considering the fixed dividend based on overall business performance [47][50]

Financial Data and Key Metrics Changes - Over the last five years, production has grown over 60%, with oil production increasing over 70% and proved reserves also rising over 60% [3][4] - The total shares outstanding remained unchanged at 114 million, indicating no dilution during this growth period [4] - Leverage decreased from 2.3 times to closer to one time, demonstrating a deleveraging trend [4][19] Business Line Data and Key Metrics Changes - The company operates in three top-tier assets: Midland Basin, South Texas, and Uinta Basin, each showcasing unique technical success stories [2][9] - In the Midland Basin, the number of wells drilled increased from a few to over 5,000, with production outperforming peers [6][10] - The Austin Chalk asset has shown significant improvement, with 465 locations identified and returns comparable to the Permian Basin [9][10] Market Data and Key Metrics Changes - The Uinta Basin has been identified as a promising area with a production profile similar to the Midland Basin, despite transportation challenges [14][15] - The Uinta Basin's margin per barrel of oil equivalent (BOE) is nearly the same as that of the Midland Basin, primarily due to high oil content [15] Company Strategy and Development Direction - The company emphasizes a returns-based technical focus, differentiating itself from competitors by leveraging technical expertise [2][22] - Future plans include continued growth without dilution or increased leverage, focusing on capital efficiency [4][19] - The company is open to M&A opportunities that meet their criteria for top-tier assets, but does not seek scale for its own sake [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the technical team's ability to identify and develop high-potential assets, particularly in the Uinta Basin [24][25] - The company is cautious about macroeconomic uncertainties but remains optimistic about its cash flow generation and return of capital strategy [32][33] Other Important Information - The company has a strong balance sheet with a $2 billion undrawn borrowing base and $100 million in cash [18][19] - A fixed dividend has been established, currently at $0.20 per quarter, with a $500 million share buyback program in place [21][22] Q&A Session Summary Question: What did the company see at the time of the Uinta Basin acquisition? - The technical team identified characteristics similar to the Permian Basin, including thick stack pay and high oil content, which justified the acquisition [23][24] Question: Does the company see potential for further growth in the Uinta Basin? - The company is open to expanding its position in the Uinta Basin if opportunities arise that meet their returns-based criteria [27][28] Question: How does the company plan to allocate free cash flow moving forward? - As leverage approaches one time, the company will prioritize share buybacks, while also considering dividend increases based on cash flow visibility [32][33]