Our other contender

Article Excerpt

ENCANA CORP. $36 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 751.2 million; Market cap: $27.0 billion; Price-to-sales ratio: 1.9: Dividend yield: 2.3%; SI Rating: Average) was also in the running for our 2010 “Stock of the Year.” It would be a more traditional pick for us, with its dividend and higher rating, and we think it has a great long-term outlook. However, when we choose a Stock of the Year, we look for something with a reasonably sure outlook for the current year. This year, EnCana has a lot riding on the weather. EnCana’s natural-gas properties in Alberta, British Columbia, Colorado, Wyoming and Texas account for 4% of North America’s daily production. It focuses on gas wells that have a long life ahead of them, and the production stability that goes with it. But the company’s cash flow and earnings depend heavily on natural-gas prices, which have been depressed in recent years by rising gas production. Colder-than-normal weather in North America…