oil prices
McCoy Global is laying off workers and consolidating its production in one facility to cut costs
SUNCOR ENERGY INC., $35.86, Toronto symbol SU, has completed its all-stock takeover of Canadian Oil Sands (Toronto symbol COS). Under the deal, Canadian Oil Sands investors received 0.28 of a Suncor share for each share they held. As a result, the Toronto Stock Exchange delisted Canadian Oil Sands’ shares on March 23, 2016. Based on Suncor’s share price just before the deal closed, it paid $4.8 billion for Canadian Oil Sands. If you include Canadian Oil Sands’ debt of $2.4 billion, the total price was $7.2 billion. To put that in context, Suncor’s market cap (the value of all outstanding shares) is $55.6 billion....
Parkland Fuel Corp., $21.35, symbol PKI on Toronto (Shares outstanding: 94.1 million; Market cap: $2.0 billion, www.parkland.ca), operates gas stations, convenience stores and a fuel-distribution business, mostly in Western Canada and Ontario. It was called Parkland Income Fund before it converted to a dividend-paying corporation on December 31, 2010. The company owns 312 rural gas stations and convenience stores. Its brands include Fas Gas Plus, Race Trac Gas and Short Stop. Many of Parkland’s stations sell propane in addition to gasoline and diesel fuel. Parkland also operates Esso stations in Western Canada and Ontario under a licensing deal with Imperial Oil (symbol IMO on Toronto). In addition, it has an agreement to use the Chevron brand in B.C....
Two international ETFs offers low MERs and exposure to strong foreign markets through tax-efficient, high-quality portfolios.
TRANSCANADA CORP., $49.08, Toronto symbol TRP, has agreed to buy Texas-based Columbia Pipeline Group (New York symbol GPCX) for $13 billion U.S. That figure includes $2.8 billion U.S. of Columbia’s debt. This is a big purchase for TransCanada, which has a market cap of $35.4 billion (Canadian). Columbia operates natural gas pipelines in the U.S. Northeast, Midwest, Mid-Atlantic and Gulf Coast regions, as well as underground gas storage terminals. It’s now working on $5.6 billion U.S. worth of new pipelines. Columbia has already secured contracts from gas shippers, which cuts the risk of these projects....
DEVON ENERGY $26.22 (New York symbol DVN; TSINetwork Rating: Speculative) (405-235-3611; www.dvn.com; Shares outstanding: 510.3 million; Market cap: $12.5 billion; Dividend yield: 0.9%) is undertaking a number of measures to conserve cash and shore up its balance sheet while it waits for oil and gas prices to recover. The company plans to cut its workforce by 20%. This will save it up to $500 million a year when combined with other cost cutting. Devon will also reduce its quarterly dividend by 75%, to $0.06 from $0.24. The shares now yield 0.9%. The dividend cut will save it $320 million a year. Devon plans to lower its exploration and development spending this year, to between $900 million and $1.1 billion. That’s down 75% from 2015. As well, the company will sell as many as 79.4 million shares at $18.75 each to raise $1.5 billion....
CHEMTRADE LOGISTICS INCOME FUND $17.46 (Toronto symbol CHE.UN; TSINetwork Rating: Speculative) (416-496-5856; www.chemtradelogistics .com; Units outstanding: 69.1 million; Market cap: $1.2 billion; Dividend yield: 6.9%) reports that in the three months ended December 31, 2015, its revenue rose 7.1%, to $335.7 million from $313.3 million a year earlier. The gain mainly came from the higher U.S. dollar, which increased the contribution from the trust’s operations in that country. Overall cash flow fell 23.5%, to $38.1 million from $49.8 million. Cash flow per share fell 28.6%, to $0.55 from $0.77, on more shares outstanding. The declines came from one-time maintenance expenditures and a $10.2 million benefits plan settlement gain a year ago. Chemtrade’s high distribution looks safe; it pays monthly distributions of $0.10 a unit, for a 6.9% yield....
Imperial Oil will focus on oil sands, refineries after selling 497 Esso stations–for double its 2015 earnings.
Dividend for Russel Metals seems sustainable and it’s managing long-term debt despite slower sales to energy producers.
AMERICAN EXPRESS CO., $59.44, New York symbol AXP, rose 2% this week on speculation that WELLS FARGO &CO., $50.05, New York symbol WFC, will soon launch a takeover offer. Berkshire Hathaway (New York symbol BKB.B), the holding company controlled by billionaire investors Warren Buffett, owns 15.6% of American Express and 9.8% of Wells Fargo. An acquisition would enhance Wells Fargo’s credit card business and give it access to Amex’s high-quality clientele. In addition, the bank’s large depositor base provides a lower-cost way of funding credit card loans. Combining the two businesses would also allow Wells Fargo to eliminate overlapping operations....