oil prices
Helped by a rise in online shopping and a string of takeovers in international markets, FedEx is taking off.
Ecolab Inc., $115.90, symbol ECL on New York (Shares outstanding: 297.4 million; Market cap: $34.6 billion; www.ecolab.com), makes chemicals for a variety of industrial uses, including cleaning, food purification, pest control and water treatment. The company sells these products through three main divisions:
- Global Industrial (35% of 2014 revenue) serves customers in the water, food and beverage, paper and commercial laundry businesses
- Global Institutional (30%) sells its products to restaurants, hotels, schools and hospitals;
- Global Energy (30%) makes chemicals for oil and natural gas exploration firms, oil refineries and pipeline operators.
Low oil and natural gas prices continue to hurt cash flow at Cenovus and Encana (see box). In response, both have issued shares to fund new projects and cut debt. The extra shares diluted existing investors’ holdings. However, they strengthened both companies’ balance sheets and put them in a better position to profit when oil and gas prices recover. CENOVUS ENERGY INC. $22 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 824.5 million; Market cap: $18.1 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.8%; TSINetwork Rating: Average) gets 35% of its revenue from its oil sands projects and conventional oil and gas wells in Western Canada....
Precision Castparts Corp., $213.79, symbol PCP on New York (Shares outstanding: 141.8 million; Market cap: $30.2 billion; www.precast.com), makes complex metal components and other products for aerospace and industrial firms. The company has three divisions:
- Forged Products (42% of total sales) manufactures specialized parts for jet engines, landing gear and other aerospace machinery, as well as industrial gas turbines and pipes. It makes these products from nickel alloys, steel and titanium.
- Airframe Products (32%) makes aircraft wings, fuselages, passenger doors and fasteners. It also produces parts for the power-generation and industrial markets.
Meta Description: With its new 50% stake in the Ruby pipeline and an LNG plant in the works, Veresen can sustain big growth and its high dividend yield.
DELPHI ENERGY $1.78 (Toronto symbol DEE; TSINetwork Rating: Speculative)(403-265-6171; www.delphienergy.ca; Shares outstanding: 155.5 million; Market cap: $269.0 million; No dividends paid) develops, produces and explores for oil and natural gas in Alberta. Its average daily production of 12,035 barrels of oil equivalent is 69% gas and 31% oil.
In the quarter ended December 31, 2014, Delphi’s cash flow per share rose 42.9%, to $0.10 from $0.07. That’s because it raised its production by 33.9% and realized higher oil prices.
Like Birchcliff, Delphi will cut spending this year: its outlays will now total $50 million, down from $101 million in 2014. However, that should still let it keep production steady at today’s levels. The company could also raise its spending later this year if oil and gas prices move higher.
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In the quarter ended December 31, 2014, Delphi’s cash flow per share rose 42.9%, to $0.10 from $0.07. That’s because it raised its production by 33.9% and realized higher oil prices.
Like Birchcliff, Delphi will cut spending this year: its outlays will now total $50 million, down from $101 million in 2014. However, that should still let it keep production steady at today’s levels. The company could also raise its spending later this year if oil and gas prices move higher.
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BIRCHCLIFF ENERGY $7.73 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Shares outstanding: 152.3 million; Market cap: $1.1 billion; No dividends paid) develops, produces and explores for oil and gas, mainly in the Peace River Arch area near the Alberta/B.C. border. About 85% of its output is gas. The remaining 15% is oil.
In the three months ended December 31, 2014, Birchcliff’s cash flow per share rose 17.1%, to $0.41 from $0.35 a year earlier. The company raised its daily output by 32.8%, offsetting lower oil prices and boosting its cash flow.
Like many oil and gas producers, Birchcliff plans to cut back on exploration and development spending. This year, it will devote $266.7 million to this purpose, down from $450.0 million in 2014.
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In the three months ended December 31, 2014, Birchcliff’s cash flow per share rose 17.1%, to $0.41 from $0.35 a year earlier. The company raised its daily output by 32.8%, offsetting lower oil prices and boosting its cash flow.
Like many oil and gas producers, Birchcliff plans to cut back on exploration and development spending. This year, it will devote $266.7 million to this purpose, down from $450.0 million in 2014.
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Every Thursday we bring you one of our best U.S. stock picks. You will read about stocks making moves you should know about, most often from our newsletter on U.S. investing, Wall Street Stock Forecaster.
On Tuesday, we profiled a Canadian company in the chemical waste business with a high dividend yield (see the article here). Today we report on a U.S. chemical stock that’s not widely known, but also has an admirable record with dividends.
QUAKER CHEMICAL CORP. (New York symbol KWR; www.quakerchem.com) began operating in 1918 and currently operates 34 plants in 21 countries. These facilities make lubricants and chemicals that keep mechanical parts from rusting.
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On Tuesday, we profiled a Canadian company in the chemical waste business with a high dividend yield (see the article here). Today we report on a U.S. chemical stock that’s not widely known, but also has an admirable record with dividends.
QUAKER CHEMICAL CORP. (New York symbol KWR; www.quakerchem.com) began operating in 1918 and currently operates 34 plants in 21 countries. These facilities make lubricants and chemicals that keep mechanical parts from rusting.
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CRESCENT POINT ENERGY CORP. $28.24 (Toronto symbol CPG; Shares outstanding: 443.4 million; Market cap: $12.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 9.8%; www.crescentpointenergy.com) produces oil and natural gas in Western Canada, with a focus on its Bakken light oil development in southeastern Saskatchewan. Its output is 92% oil and 8% gas. In the three months ended December 31, 2014, Crescent Point’s cash flow rose 7.4%, to $572.9 million from $533.3 million a year earlier. The company raised its daily output by 20.5%, which offset lower oil prices and increased its cash flow. Cash flow per share fell 5.2%, to $1.28 from $1.35, because the company issued shares to pay for acquisitions, including $378.0 million for oil properties from Lightstream Resources in September 2015....
POWER CORP. $33.52 (Toronto symbol POW; Shares outstanding: 412.6 million; Market cap: $15.5 billion; TSINetwork Rating: Above Average; Div. yield: 3.5%; www.powercorporation.com) is a diversified holding company. It holds its financial assets through 65.7%-owned Power Financial. These financial assets include 68.1% of Great- West Lifeco, one of Canada’s largest life insurers, and 58.7% of IGM Financial, a leading Canadian mutual fund provider. As well, Power Financial owns 50% of holding company Parjointco, which holds a 55.5% stake in Switzerland-listed Pargesa Holdings SA. Pargesa has 95% of its assets in five large European firms: Imerys (minerals), Total SA (oil), Pernod Ricard (wine and spirits), SGS (inspection, testing and certification services) and Lafarge (cement and building materials). Power Corp. also has investments in Asia....