Cenovus Energy Inc.
Cenovus Energy took its present form on December 1, 2009, after the old EnCana Corp. split itself into two new companies: Cenovus, which specializes in oil sands, and the new Encana (see box at right), which focuses on natural gas. Lower gas prices have pushed Encana’s shares down by about 68% since the split, but Cenovus’s stock is up about 12%.
The stock trades at higher multiples to earnings and cash flow than larger oil sands operations like Suncor and Imperial Oil....
The stock trades at higher multiples to earnings and cash flow than larger oil sands operations like Suncor and Imperial Oil....
ISHARES S&P/TSX 60 INDEX FUND $17.88 (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, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.
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, 8.2%; TD Bank, 7.1%; Bank of Nova Scotia, 6.2%; Suncor Energy, 4.5%; CN Railway, 3.9%; Bank of Montreal, 3.7%; Enbridge, 3.4%; Canadian Natural Resources, 3.2%; TransCanada Corporation, 3.0%; Manulife Financial, 3.0%; BCE, 2.9%; CIBC, 2.8%; Valeant Pharmaceuticals, 2.8%; Potash Corp., 2.3%; Cenovus Energy, 2.0%; and Goldcorp, 2.0%.
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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, 8.2%; TD Bank, 7.1%; Bank of Nova Scotia, 6.2%; Suncor Energy, 4.5%; CN Railway, 3.9%; Bank of Montreal, 3.7%; Enbridge, 3.4%; Canadian Natural Resources, 3.2%; TransCanada Corporation, 3.0%; Manulife Financial, 3.0%; BCE, 2.9%; CIBC, 2.8%; Valeant Pharmaceuticals, 2.8%; Potash Corp., 2.3%; Cenovus Energy, 2.0%; and Goldcorp, 2.0%.
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Exchange-traded funds (ETFs) are set up to mirror the performance of a stock-market index or subindex. They hold a more-or-less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.
ETFs trade on stock exchanges, just like stocks....
ETFs trade on stock exchanges, just like stocks....
CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.0%; TSINetwork Rating: Average; www.cenovus.com) plans to ship more of the heavy bitumen from its Alberta oil sands projects by rail, in response to a lack of pipeline capacity and uncertainty over the Keystone XL project (see page 71).
By the end of 2013, the company expects to ship 10,000 barrels a day by rail, mostly lighter oil from its properties in Saskatchewan. It aims to boost that total to 30,000 barrels a day by the end of 2014. That’s equal to 17% of Cenovus’s current daily output of 180,000 barrels. The company has leased 800 railcars to support this expansion.
Cenovus is a buy....
By the end of 2013, the company expects to ship 10,000 barrels a day by rail, mostly lighter oil from its properties in Saskatchewan. It aims to boost that total to 30,000 barrels a day by the end of 2014. That’s equal to 17% of Cenovus’s current daily output of 180,000 barrels. The company has leased 800 railcars to support this expansion.
Cenovus is a buy....
CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 3.0%; TSINetwork Rating: Average; www.cenovus.com) plans to ship more of the heavy bitumen from its Alberta oil sands projects by rail, in response to a lack of pipeline capacity and uncertainty over the Keystone XL project (see page 71).
By the end of 2013, the company expects to ship 10,000 barrels a day by rail, mostly lighter oil from its properties in Saskatchewan....
By the end of 2013, the company expects to ship 10,000 barrels a day by rail, mostly lighter oil from its properties in Saskatchewan....
CANADIAN PACIFIC RAILWAY $127.99 (Toronto symbol CP; Shares outstanding: 174.7 million; Market cap: $22.6 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.cpr.ca) continues to benefit from its aggressive plan to improve its efficiency with new locomotives, upgraded tracks and software that optimizes train loads and speeds.
For example, CP has cut the time it takes to ship intermodal containers between Toronto and Calgary by 20 hours....
For example, CP has cut the time it takes to ship intermodal containers between Toronto and Calgary by 20 hours....
U.S. oil production is up 40% since 2008. That’slargely because of new technologies like hydraulicfracturing, or fracking. This involves injecting water,sand and chemicals to break up shale and other tightrock formations and allow access to the oil and gas.
The global economy continues to recover from therecession, so rising demand from industry and consumersshould help stabilize oil and gas prices, even asoutput from shale increases.
The best way to profit from this volatile industry isthrough companies with high-quality reserves and diverseoperations, such as these four....
The global economy continues to recover from therecession, so rising demand from industry and consumersshould help stabilize oil and gas prices, even asoutput from shale increases.
The best way to profit from this volatile industry isthrough companies with high-quality reserves and diverseoperations, such as these four....
CENOVUS ENERGY INC.$28 (New York symbol CVE;Conservative Growth Portfolio,Resources sector; Sharesoutstanding: 755.6 million;Market cap: $21.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.3%; TSINetworkRating: Average; www.cenovus.com) gets half itsoutput from the western Canadian oil sands.Conventional oil and gas wells supply the other half.
U.S.-based Phillips 66 (New York symbol PSX)owns 50% of Cenovus’s main Foster Creek and ChristinaLake oil sands projects in Alberta. These assetsproduce heavy bitumen, which Cenovus ships to its50%-owned refineries in Illinois and Texas. Phillips 66owns the other 50% of these operations.
In the first three months of 2013, Cenovus produced271,100 barrels of oil equivalent a day (66% oil and34% gas), up 3.1% from 262,900 barrels a year earlier.However, lower oil prices cut Cenovus’s revenueby 5.4%, to $4.3 billion from $4.6 billion a year earlier(all amounts except share price and market cap inCanadian dollars).
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U.S.-based Phillips 66 (New York symbol PSX)owns 50% of Cenovus’s main Foster Creek and ChristinaLake oil sands projects in Alberta. These assetsproduce heavy bitumen, which Cenovus ships to its50%-owned refineries in Illinois and Texas. Phillips 66owns the other 50% of these operations.
In the first three months of 2013, Cenovus produced271,100 barrels of oil equivalent a day (66% oil and34% gas), up 3.1% from 262,900 barrels a year earlier.However, lower oil prices cut Cenovus’s revenueby 5.4%, to $4.3 billion from $4.6 billion a year earlier(all amounts except share price and market cap inCanadian dollars).
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CENOVUS ENERGY INC., $29.59, Toronto symbol CVE, is selling its Shaunavon shale oil property in Saskatchewan. This field produces 3,600 barrels a day, or about 2% of Cenovus’s total oil production. The company will receive $240 million when the deal closes in July 2013. That’s equal to 61% of the $391 million, or $0.52 a share, that Cenovus earned in the three months ended March 31, 2013. The sale is part of Cenovus’s plan to sell some of its less-important operations. The company also expects to sell its Bakken shale oil property in Saskatchewan in the next few months. It will probably use the cash from these deals to expand its main oil sands operations in Alberta....
ISHARES S&P/TSX 60 INDEX FUND $17.66 (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, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.17% of assets.
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, 7.8%; TD Bank, 6.7%; Bank of Nova Scotia, 6.0%; Suncor Energy, 4.6%; Bank of Montreal, 3.6%; CN Railway, 3.6%; Potash Corp., 3.3%; Enbridge, 3.1%; Trans- Canada Corp., 3.0%; BCE, 3.0%; CIBC, 2.9%; Canadian Natural Resources, 2.9%; Barrick Gold, 2.9%; Goldcorp, 2.6%; Manulife Financial, 2.3%; Cenovus Energy, 2.2%; and Telus, 1.9%.
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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, 7.8%; TD Bank, 6.7%; Bank of Nova Scotia, 6.0%; Suncor Energy, 4.6%; Bank of Montreal, 3.6%; CN Railway, 3.6%; Potash Corp., 3.3%; Enbridge, 3.1%; Trans- Canada Corp., 3.0%; BCE, 3.0%; CIBC, 2.9%; Canadian Natural Resources, 2.9%; Barrick Gold, 2.9%; Goldcorp, 2.6%; Manulife Financial, 2.3%; Cenovus Energy, 2.2%; and Telus, 1.9%.
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