PENGROWTH ENERGY $6.66 - Toronto symbol PGF

PENGROWTH ENERGY $6.66 (Toronto symbol PGF; Shares outstanding: 519.8 million; Market cap: $3.5 billion; TSINetwork Rating: Average; Dividend yield: 7.2%; www.pengrowth.com) recently sold off $1 billion of less-important properties to raise funds for its $590-million Lindbergh oil sands project in Alberta.

As a result, Pengrowth’s average daily production fell 11.7% in the three months ended September 30, 2013, to 83,275 barrels of oil equivalent (57% gas, 43% oil) from 94,284 a year earlier. But thanks to higher prices, cash flow per share rose 10.7%, to $0.31 from $0.28.

The stock is up 33% since the start of 2013, but it still trades at just 5.8 times the company’s forecast 2014 cash flow of $1.14 a share.

Pengrowth is a buy.

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