Noble Energy (NYSE:NBL) doesn't get the credit it deserves for the remarkable transformation it has undertaken in recent years. By jettisoning several bland assets and replacing them with much higher-quality ones, it's gone from a ho-hum oil company to one with enticing growth prospects. As a result, it's on pace to deliver meaningful growth for investors in the coming years.

The market, however, hasn't noticed. While Noble Energy's stock is up nearly 30% over the past year, it has underperformed the price of oil -- which is up more than 60% -- as well as most other oil stocks since the average one is up about 37% over that time frame as measured by the Dow Jones U.S. Select Oil Exploration & Production Index. Because of that, and some other factors, Noble Energy's stock could have more upside than most rivals, which is something investors won't want to miss.

A silhouette of an oil pump in an oil field at sunset.

Image source: Getty Images.

Hitting the turning point

In February, Noble Energy provided an updated outlook on what it could deliver for investors in the future thanks to its portfolio transformation. The company detailed a strategy where it planned to invest about $2.8 billion per year on drilling new wells across its portfolio, which means it could grow production at a 20% compound annual growth rate through 2020, with oil output expanding at 25% pace. According to Noble, it could support that program on the cash flow it can generate on $50 oil, with the company expecting this number to expand at a 35% compound annual rate. Its plan would produce about $1.5 billion in excess cash over that three-year period as long as crude averages $50 a barrel. Noble intends to return nearly all that money -- about $1.3 billion -- to shareholders via a $750 million share repurchase program and about $550 million in dividends. Meanwhile, the rest of its excess cash would help pay down debt, putting it in position to hit its target level by 2020.

Because Noble Energy can thrive on $50 oil, it's set up to make a mint at higher oil prices. At around $60 a barrel, the company's plan would generate more than $3 billion in excess cash through 2020, with even more upside if crude remains at its current level in the $70s. That windfall could allow Noble Energy to boost its share repurchase program, which is the approach many rivals have taken over the past few months.

Don't miss this

One facet of Noble Energy's plan that investors won't want to overlook is the rate it can expand cash flow. As noted, at $50 a barrel, its strategy can generate 35% compound annual cash flow growth, which puts Noble on an elite level compared to its peers.

One of the few companies that come close is Encana (NYSE:ECA). Last fall, Encana put out its updated five-year strategy, which has it poised to deliver 25% compound annual cash flow growth at $55 oil. Furthermore, Encana's strategy would produce about $3 billion in excess cash over that time frame. While Encana's plan would see it grow at a high rate further into the future, it does require a slightly higher oil price.

Another company with an impressive cash flow growth forecast is Devon Energy (NYSE:DVN), which expects that number to increase at a 25% compound annual growth rate through 2020. However, Devon's plan requires that crude oil averages $60 a barrel over that time frame. On the bright side, that oil price point would enable Devon to generate a whopping $2.5 billion in free cash over the next few years, which could give it even more fuel to add to its already-impressive share repurchase program.

While many other companies also expect to expand cash flow at a healthy rate going forward, Noble Energy is in a league of its own because it can grow cash flow at a higher rate and from a lower oil price point than rivals.

The fuel to outperform

Noble Energy's fast-growing cash flow stream alone could provide the fuel needed to generate higher returns than rivals in the future. However, the company will likely add an accelerant by using its excess cash to buy back shares. Similar repurchase programs have already done wonders for the share prices of rivals, and will likely do the same for Noble's going forward, which is why investors will want to take a closer look at this oil stock.