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PEYTO EXPLORATION & DEVELOPMENT CORP. $30.95 (Toronto symbol PEY; Shares outstanding: 159.2 million; Market cap: $4.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.3%; www.peyto.com) produces and explores for oil and natural gas in Alberta. Its average daily production of 97,028 barrels of oil equivalent is 93% gas and 7% oil. In the three months ended December 31, 2015, Peyto’s cash flow fell 15.9%, to $0.95 a share from $1.13 a year ago. It raised its production by 16.5%, but that was offset by lower oil and gas prices. Its realized oil price year over year fell 28.1%, and natural gas prices fell 20.9%. The company has cut it’s original 2016 capital spending of $600 million to $650 million down to between $500 million and $550 million. It spent $594 million in 2015....
BONAVISTA ENERGY $2.76 (Toronto symbol BNP; Shares outstanding: 214.0 million; Market cap: $626.1 million; TSINetwork Rating: Extra Risk; Dividend yield: 4.4%; www.bonavistaenergy.com) explores for oil and gas in Alberta, Saskatchewan and B.C. Its output is 68% gas and 32% oil. In the quarter ended December 31, 2015, Bonavista’s cash flow per share fell 30.2%, to $0.44 from $0.63 a year earlier. Most of that drop came from lower oil and gas prices, but also because of falling output. It declined 6.9%, to 79,862 barrels of oil equivalent per day from 85,810 barrels. Like many producers, the company will cut its exploration and development. In 2016, it plans to spend $145 million to $190 million. That’s a reduction from Bonavista’s initial announcement of $210 million, which is down from the $283.4 million it spent in 2015. It spent $639.6 million in 2014....
CENOVUS ENERGY $18.88 (Toronto symbol CVE; Shares outstanding: 833.2 million; Market cap: $15.8 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.cenovus.com) owns oil sands operations and conventional wells in Western Canada. It ships its oil to its 50%- owned refineries in Illinois and Texas. Due to low oil prices, Cenovus has shrunk its workforce by 31% since the start of 2015. These cuts will save it $200 million this year. They should also help expand its cash flow when oil prices recover. In the first quarter of 2016, the company’s cash flow was just $26 million, or $0.03 a share, Meanwhile, the balance sheet is strong: Cenovus holds cash of $3.9 billion, or $4.68 a share. Long-term debt of $6.1 billion is a manageable 38% of its market cap....
ISHARES S&P/TSX 60 INDEX ETF $20.09 (Toronto symbol XIU; buy or sell through brokers; ca.ishares.com) is a good low-fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index—the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.18% of assets, and it yields 2.9%. The index mostly consists of high-quality companies. However, it must ensure that all sectors are represented, so it holds a few we wouldn’t include. The index’s top holdings are Royal Bank, 8.6%; TD Bank, 7.7%; Bank of Nova Scotia, 5.9%; CN Railway, 4.6%; Suncor Energy, 4.4%; Bank of Montreal, 3.9%; BCE, 3.8%; Enbridge, 3.6%; Canadian Natural Resources, 3.1%; CIBC, 3.0%; and Brookfield Asset Management, 2.8%....