oil and gas

VANGUARD GROWTH ETF $108.87 (New York symbol VUG; buy or sell through brokers) aims to track the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index, a broadly diversified index that mainly consists of large U.S. companies. The fund’s MER is just 0.09%.

The $47.8-billion Vanguard Growth ETF’s top holdings are Apple, Google, Coca-Cola, Facebook, Oracle, Home Depot, Comcast, Amazon.com, Gilead Sciences and Walt Disney Co.

The fund’s breakdown by industry is as follows: Technology, 24.0%; Consumer Services, 21.3%; Health Care, 13.4%; Financials, 13.0%; Industrials, 11.7%; Consumer Goods, 9.4%; Oil and Gas, 5.3%; Materials, 1.5%; Telecommunication Services, 0.3%; and Utilities, 0.1%.

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BONAVISTA ENERGY $8.02 (Toronto symbol BNP; Shares outstanding: 203.8 million; Market cap: $1.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 5.2%; www.bonavistaenergy.com) explores for oil and natural gas in Alberta, Saskatchewan and British Columbia. Its production is 70% gas and 30% oil.

In the three months ended December 31, 2014, Bonavista’s cash flow per share rose 1.6%, to $0.63 from $0.62 a year earlier.

The company’s output gained 14.3%, to 85,810 barrels of oil equivalent a day from 75,072. However, lower oil prices mostly offset the production increase and higher realized gas prices.

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ISHARES CHINA LARGE-CAP ETF $51.98 (New York symbol FXI; buy or sell through brokers) is an exchange traded fund that aims to track the Financial Times Stock Exchange (FTSE) China 50 Index, which is made up of the 50 largest, most liquid Chinese stocks. All of the companies in the index trade on the Hong Kong exchange. Some also trade as American depositary receipts (ADRs) on New York.

The fund’s top holdings are Tencent Holdings, 8.8%; China Mobile, 8.0%; China Construction Bank, 7.5%; Industrial & Commercial Bank, 6.8%; Bank of China, 5.9%; Ping An Insurance, 4.5%; China Life, 4.4%; CNOOC Ltd., 3.9%; PetroChina, 3.8%; China Petroleum and Chemical, 3.4%; and China Overseas Land & Investment, 2.5%.

The fund’s holdings give it the following industry breakdown: Financials, 48.1%; Telecommunications, 11.7%; Oil and Gas, 11.6%; Technology, 11.1%; Industrials, 6.2%; Consumer Goods, 6.4%; and Utilities, 2.1%. Its expense ratio is 0.74%.

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Air Products & Chemicals Inc., $147.51, symbol APD on New York (Shares outstanding: 214.3 million; Market cap: $31.8 billion; www.airproducts.com), sells gases extracted from the atmosphere (oxygen, nitrogen) and other sources (hydrogen, helium) to clients including oil and gas exploration firms, industrial-equipment manufacturers, electronics makers and health care companies. It also provides products and services for designing, building and operating liquefied natural gas (LNG) plants. In its fiscal 2015 second quarter, which ended March 31, 2015, the company’s revenue fell 6.5%, to $2.41 billion from $2.58 billion. Air Products gets about 60% of its sales from outside of the U.S., and the strong U.S. dollar offset price increases and higher sales volumes....

Focusing on one region can be risky for bank stocks and falling oil prices have compounded that risk for Canadian Western Bank.

AGT FOOD & INGREDIENTS INC., $28.51, symbol AGT on Toronto, buys and processes a range of pulses—which include peas, beans, lentils and chickpeas—as well as other specialty crops. The Saskatchewan-based company owns 13 processing plants in Canada, nine in Turkey, four in Australia, two in the U.S., one in China and one in South Africa. Before one-time items, AGT earned $0.42 a share in the quarter ended March 31, 2015, up 162.5% from $0.16 a year earlier. Revenue gained 23.7%, to $385.2 million from $311.3 million. The increases came from recent acquisitions and higher processing activity....

CANADIAN TIRE CORP., $133.55, Toronto symbol CTC.A, recently sold 20% of its financial services division to Bank of Nova Scotia (Toronto symbol BNS) for $500 million. That’s the main reason why the company’s earnings fell 3.0% in the quarter ended April 4, 2015, to $68.5 million from $70.6 million a year earlier. Per-share profits were unchanged at $0.88 on fewer shares outstanding, but that beat the consensus estimate of $0.87. Overall sales fell 2.3%, to $2.5 billion from $2.6 billion, mainly because lower gasoline prices hurt revenue at Canadian Tire’s gas stations. But if you exclude fuel-station revenue, the company’s overall sales gained 2.2%....

In addition to TransCanada (see page 51), we like these three pipeline operators’ prospects. All of them are investing in projects that will spur their cash flows—and dividends—for years to come. ENBRIDGE INC. $61 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 855.0 million; Market cap: $52.2 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and natural gas from Western Canada to Eastern Canada and the U.S. The remaining 10% mainly comes from distributing gas to 2.1 million consumers in Ontario, Quebec, New Brunswick and New York State. The company plans to spend $44 billion on new pipelines and expansions between 2014 and 2018. It completed $9.8 billion worth of that total in 2014 and expects to finish another $8.7 billion worth this year. Enbridge has already secured shipping contracts for $34 billion worth of these projects, which cuts its risk....

PENGROWTH ENERGY CORP. $3.74 (Toronto symbol PGF; Aggressive Growth and Income Portfolios, Resources sector; Shares outstanding: 538.0 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 6.4%; TSINetwork Rating: Average; www.pengrowth.com) recently started up its Lindbergh oil sands project in eastern Alberta, which should produce 16,000 barrels a day by the end of 2015. The company has shut down less profitable wells in response to weak oil and gas prices. That’s why its average production fell 7.7% in the first quarter of 2015, to 69,334 barrels a day (52% oil and liquids, 48% gas) from 75,102 a year earlier. Without unusual items, Pengrowth earned $64.8 million, compared to a loss of $2.8 million. Cash flow per share fell 22.2%, to $0.21 from $0.27. For the remainder of 2015, the company has hedged 78% of its oil production at $93.87 (Canadian) a barrel, well above today’s price of $60.16 U.S. It has also hedged 57% of its gas output at $3.72 (Canadian) per thousand cubic feet, compared to the current price of $2.94 U.S. The company’s hedges were worth $354.3 million as of March 31, 2015....

Canadian Western Bank, $29.23, symbol CWB on Toronto (Shares outstanding: 80.4 million; Market cap: $2.4 billion; www.cwbank.com), offers business and personal banking services across the four western provinces. It’s the biggest Canadian bank headquartered in Western Canada and the country’s eighth-largest. The bank’s wholly owned subsidiaries include National Leasing Group, Canadian Western Trust Company, Valiant Trust Company, Canadian Direct Insurance and Canadian Western Financial. In the three months ended January 31, 2015, Canadian Western Bank’s earnings rose 6.8%, to $52.4 million, or $0.65 a share. A year earlier, it earned $49.1 million, or $0.61. Revenue improved 6.1%, to $150.9 million from $142.2 million....