Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.

Resource and commodity stocks in general should make up only a limited portion of your portfolio—say less than 20% for a conservative investor or as much as 30% for an aggressive investor. And as part of that segment, energy stocks could make up, say half of that total. The rest could be fertilizer stocks, mining stocks and so on.

Oil and gas stocks have been below-average performers lately, and many investors are tempted to get out of the industry altogether. However, the energy sector can play a crucial role in your portfolio as a hedge against inflation. The low inflation rates of the past couple of decades deserve some of the blame for the poor performance of the sector. However, energy stocks will likely rebound in years to come as the global economy recovers.

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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Energy Stocks Library Archives

Cenovus rewards its investors

CENOVUS ENERGY INC., $11, is a buy. The company (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.2 billion; Market cap: $13.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.3%; TSINetwork Rating: Extra Risk; www.cenovus.com) continues to do a good job paying down the loans it needed… Read More

Pengrowth may seek buyer

PENGROWTH ENERGY $0.25 (Toronto symbol PGF; Shares outstanding: 547.4 million; Market cap: $145.6 million; TSINetwork Rating: Speculative; No dividends paid; www.pengrowth.com) has two main properties: its Lindbergh oil sands project in Alberta, and its Groundbirch natural gas property in northeastern B.C.

Pengrowth produced an average of… Read More

Their strong balance sheets are a major plus

ARC RESOURCES $6.04 (Toronto symbol ARX; Shares outstanding: 352.1 million; Market cap: $2.2 billion; TSINetwork Rating: Speculative; Dividend yield: 9.9%; www.arcresources.com) produces oil and natural gas in Western Canada. Its average output of 139,054 barrels of oil equivalent per day is 74% natural gas and… Read More

Updating McCoy Global, Sasol Ltd. (ADR) and Hecla Mining

MCCOY GLOBAL $0.62 (Toronto symbol MCB; TSINetwork Rating: Speculative) (780-453-8451; www.mccoyglobal.com; Shares outstanding: 27.4 million; Market capitalization: $17.1 million; No dividends paid) sells power tongs and other hydraulic gear for oil and gas drilling rigs. (Power tongs are wrench-like tools that tighten and loosen the… Read More

Delphi is now a hold

DELPHI ENERGY $0.09 (Toronto symbol DEE; TSINetwork Rating: Speculative) (403-265-6171; www.delphienergy.ca; Shares o/s: 185.5 million; Market cap: $16.7 million) explores for, develops and produces oil and natural gas.
In the quarter ended June 30, 2019, Delphi’s cash flow per share fell 25.0%, to $0.06 from… Read More

This restart will lift Suncor’s revenue

SUNCOR ENERGY INC. $40 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $64.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 4.2%; TSINetwork Rating: Average; www.suncor.com) is Canada’s largest integrated oil company, with major projects in the Alberta oil sands. It… Read More

CVE’s debt is manageable

CENOVUS ENERGY $11.52 (Toronto symbol CVE; Shares outstanding: 1.2 billion; Market cap: $14.2 billion; TSINetwork Rating: Average; Dividend yield: 1.7%; www.cenovus.com) acquired 100% of its main Alberta oil sands properties—Christina Lake and Foster Creek—in May 2017. It paid ConocoPhillips (New York symbol COP) $17.7 billion in… Read More

Refineries make Chevron the better choice

The slowing global economy continues to weigh on oil prices. That, in turn, has hurt the stock prices of oil producers.
We still advise investors to maintain some exposure to oil. For new buying, however, we prefer integrated producers like Chevron over exploration firms like Apache… Read More

Profits rise on drilling rebound

ENERFLEX LTD. $13.06 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 89.5 million; Market cap: $1.2 billion; Dividend yield: 3.2%) rents and sells equipment and services for natural gas production. That includes refrigeration gear and systems, power generators and processing plants.

The company’s… Read More

Paramount adds assets

PARAMOUNT RESOURCES $6.08 (Toronto symbol POU; TSINetwork Rating: Speculative) (403-290-3600; www.paramountres.com; Shares outstanding: 130.9 million; Market cap: $796.0 million; No dividends paid) owns oil and gas properties in Alberta and B.C.

Paramount has now reportedly bought the Alberta oil sands assets of Koch Industries. That company… Read More

High-quality operations make Imperial a buy

IMPERIAL OIL LTD. $33 (Toronto symbol IMO; Conservative Growth and Income Portfolios, Shares outstanding: 802.7 million; Market cap: $26.5 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.7%; TSINetwork Rating: Average; www.imperialoil.ca) is a leading Canadian producer and refiner on crude oil. U.S.-based ExxonMobil (New York symbol… Read More

Encana rewards investors

ENCANA CORP. $6.03 (Toronto symbol ECA; Shares o/s: 1.4 billion; Market cap: $7.7 billion; TSINetwork Rating: Average; Divd. yield: 1.7%) plans to buy back up to $213 million U.S. of its common shares (about 3% of the total) through a Dutch auction process. Share repurchases raise earnings… Read More

Two beaten-down juniors: 1 buy, 1 hold

PEYTO EXPLORATION & DEVELOPMENT CORP. $4.00 (Toronto symbol PEY; Shares outstanding: 164.6 million; Market cap: $644.3 million; TSINetwork Rating: Extra Risk; Dividend yield: 6.0%; www.peyto.com) produces and explores for natural gas and oil in Alberta. Its production is 88% gas and 12% oil.
In the quarter ended March… Read More

Cost cuts are paying off

PARAMOUNT RESOURCES $6.87 (Toronto symbol POU; TSINetwork Rating: Speculative) (403-290-3600; www.paramountres.com; Shares outstanding: 130.9 million; Market cap: $943.2 million; No dividends paid) owns oil and gas properties in Alberta and B.C.
The company cut development spending to conserve cash due to low oil and gas prices. The move reduced… Read More

They’re setting themselves up for gains

CIMAREX ENERGY $49.76 (New York symbol XEC; TSINetwork Rating: Extra Risk) (303-295-3995; www.cimarex.com; Shares outstanding: 101.4 million; Market cap: $5.2 billion; Dividend yield: 1.6%) produces and explores for natural gas and oil. Gas makes up 41% of the company’s output; the remaining 59% is oil.
In the three months… Read More

Falling costs cut Suncor’s cyclical risk

SUNCOR ENERGY INC. $42 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $67.2 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.0%; TSINetwork Rating: Average; www.suncor.com) is Canada’s largest integrated oil company, with major projects in the Alberta oil sands. It also owns… Read More

Aggressive stocks have a key role to play

Aggressive stocks, such as those featured in the portfolio on page 80, can lead to big returns. However, due to the risky or cyclical nature of their businesses, investment in higher-growth stocks can also produce big losses. That’s why you should limit your aggressive holdings… Read More