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.
Invest mainly in well-established companies;
Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
Downplay or avoid stocks in the broker/media limelight.
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The shares of oil and gas stocks remain high as energy demand stays strong. We continue to recommend that most investors maintain some exposure to the oil and gas industry as part of a balanced portfolio. But, to cut risk, you should stick with producers that… Read More
PHILIPS ELECTRONICS N.V. ADRs $21 is a hold. The company (New York symbol PHG; Conservative Growth Portfolio, Manufacturing sector; ADRs o/s: 920.8 million; Market cap: $19.3 billion; Price-to-sales ratio: 1.0; Divd. yield: 4.5%; TSINetwork Rating: Average; www.philips.com) makes industrial health-care products, including X-ray scanners and ultrasound systems, along… Read More
SUNCOR ENERGY INC. $43 is a buy. The company (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares o/s: 1.3 billion; Market cap: $55.9 billion; Price-to-sales ratio: 1.1: Dividend yield: 4.8%; TSINetwork Rating: Average; www.suncor.com) recently announced a new strategy under which it will focus on its core… Read More
OPEC and Russia (together accounting for about 40% of the world’s oil production) recently agreed to extend their current production cuts until the end of 2023, and likely into 2024. That has helped lift oil prices from about $67 U.S. a barrel in June to… Read More
Demand for Major Drilling’s specialized services is now recovering. Meanwhile, Computer Modelling is benefiting from expanding oil and gas drilling in response to overall higher energy prices. We think there are still gains ahead for both stocks.
MAJOR DRILLING, $8.04, is a buy. This large contract driller… Read More
CENOVUS ENERGY INC. $28 is a buy. The company (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $53.2 billion; Price-to-sales ratio: 0.9; Dividend yield 2.0%; TSINetwork Rating: Average; www.cenovus.com) is now Canada’s third-largest producer of oil and natural gas after Canadian Natural… Read More
In the past few years, Ovintiv, formerly known as Encana, has narrowed its focus to four key properties with large reserves. The company is also doing a good job cutting its operating costs. That puts it in a strong position to profit from the recent… Read More
ARC RESOURCES, $20.28, is a buy. The company (Toronto symbol ARX; Shares outstanding: 607.8 million; Market cap: $12.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 3.4%; www.arcresources.com) produces natural gas as well as oil. Its average output of 343,630 barrels of oil equivalent per day is 63% natural gas and… Read More
PEYTO EXPLORATION & DEVELOPMENT, $13.20, is a buy for aggressive investors. This gas producer (Toronto symbol PEY; Shares outstanding: 175.1 million; Market cap: $2.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 10.0%; www.peyto.com) will now buy Spanish energy company Repsol’s assets in Canada for $468 million U.S.
The assets… Read More
Long-time readers know that we aim to keep you informed of important news about the stocks we cover. That means highlighting developments and plans that promise to bolster investor gains. Here are two buys that stand out this month:
THERMO FISHER SCIENTIFIC INC., $504.89, is a.. Read More
CAE INC. $33 (www.cae.com) remains a buy. The company expects the global air travel industry will need 1.3 million new pilots, aircraft maintenance technicians and cabin crew over the next 10 years. That’s due to rising retirement and turnover rates. For the fiscal year ending March 31, 2024,… Read More
TC ENERGY INC., $49.10, is a buy. The company (Toronto symbol TRP; Shares outstanding: 1.0 billion; Market cap: $48.9 billion; TSINetwork Rating: Above Average; Dividend yield: 7.6%; www.tcenergy.com.) has proposed building a new pumped storage hydro power project near Meaford, Ontario. The system would pump water from Georgian Bay… Read More
OVINTIV INC., $64.14, is a buy. The energy producer (Toronto symbol OVV; Shares outstanding: 273.9 million; Market cap: $17.6 billion; TSINetwork Rating: Average; Dividend yield: 2.5%) recently paid private equity firm EnCap Investments L.P. $4.4 billion U.S. (73% in cash, 27% in shares) for 1,050 wells in the… Read More
The shares of oil and gas stocks remain high as energy demand remains strong. We continue to recommend that most investors maintain some exposure to the oil and gas industry as part of a balanced portfolio. But, to cut risk, you should stick with producers that… Read More
Oil prices shot up to over $120 U.S. a barrel in the wake of Russia’s invasion of Ukraine but have since eased to around $84 U.S. Despite that drop, Cenovus continues to pay down its debt. That improving balance sheet also sets you up for… Read More
IMPERIAL OIL LTD., $69.74, is a buy. The company (Toronto symbol IMO; Shares outstanding: 584.2 million; Market cap: $41.5 billion; TSINetwork Rating: Average; Dividend yield: 2.9%; www.imperialoil.ca) gets about 90% of its production from oil sands operations in Alberta. Imperial also has conventional oil and gas operations in… Read More
CHEVRON CORP. $161 is a buy. The company (New York symbol CVX; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $305.9 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.8%; TSINetwork Rating: Average; www.chevron.com) is the second-largest integrated oil producer in the U.S. by revenue after ExxonMobil… Read More
Oil and gas stocks moved up as the U.S. and other economies recovered after the pandemic. The war in Ukraine also spurred prices. Prices have softened lately on fears of slowing global economies, but we still recommend that most investors maintain exposure to the oil… Read More
Following a strategic review—driven by pressure from activist investor Elliott Investment Management—Suncor has decided to hang onto its Petro-Canada chain of gas stations. It’s also shifting its focus to its core oil sands projects in Alberta and to improving its efficiency. These moves should boost… Read More
