oil prices
RESTAURANT BRANDS INTERNATIONAL INC., $52.21, Toronto symbol QSR, took its current form on December 12, 2014, as a result of Burger King Worldwide’s (old symbol BKW) acquisition of Tim Hortons Inc. (old symbol THI). Restaurant Brands is the world’s third-largest fast-food chain, after McDonald’s and Yum Brands, with 14,372 Burger King outlets and 4,671 Tim Hortons locations in 100 countries. In the three months ended December 31, 2014, the company lost $514.2 million, or $2.52 a share, compared to a profit of $66.8 million, or $0.19 (all amounts except share price in U.S. dollars). If you exclude merger costs and other unusual items, gross earnings before depreciation, interest and taxes rose 23.1%....
CAMECO CORP. $19.80 (Toronto symbol CCO; TSINetwork Rating: Extra Risk) (306-956-6200; www.cameco.com; Shares outstanding: 395.8 million; Market cap: $7.9 billion; Dividend yield 2.0%) is the world’s largest uranium producer. It supplies 16% of global mine production and has large, high-grade reserves, low-cost operations, significant market share and many mines. Cameco is also one of the western world’s largest converters of enriched uranium for use in nuclear reactors. In addition, it owns NUKEM, a nuclear-fuel trader and broker. In the three months ended December 31, 2014, Cameco’s revenue fell 9.0%, to $889 million from $977 million a year earlier. It sold more uranium at higher prices in the latest quarter. However, the yearago quarter included revenue from the company’s 31.6% stake in Ontario’s Bruce Power partnership, which it sold in early 2014....
WESTJET AIRLINES $30.63 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1- 877-493-7853; www.westjet.com; Shares outstanding: 127.8 million; Market cap: $4.0 billion; Dividend yield: 1.8%) reports that its earnings per share jumped 34.6% in the three months ended December 31, 2014, to $0.70 from $0.52 a year earlier. Revenue rose 7.3%, to $994.4 million from $926.4 million. Fuel makes up around a third of an airline’s operating expenses, and WestJet continues to benefit as its fuel costs drop along with oil prices. The company is returning some of its higher profits to shareholders: it has just raised its quarterly dividend by 16.7% with the March 2015 payment, to $0.14 from $0.12. The stock now yields 1.8%....
Journey Energy, $5.75, symbol JOY on Toronto (Shares outstanding: 33.0 million; Market cap: $189.8 million; www.journeyenergy.ca), is an oil and gas producer that’s focused on southern Alberta. Its production is 55% oil and 45% natural gas. The company first sold shares to the public at $12 each and began trading on Toronto on June 19, 2014. In the three months ended September 30, 2014, Journey’s production jumped 103.5%, to 11,002 barrels of oil equivalent from 5,408 a year earlier. The gains mainly came from a major acquisition that closed in March 2014. Cash flow rose 24.5%, to $0.61 a share from $0.49....
Linn Energy, $13.13, symbol LINE on Nasdaq (Shares outstanding: 331.9 million; Market cap: $4.4 billion; www.linnenergy.com), acquires and develops oil and gas properties in the Mid-Continent region in the southern U.S., the Permian Basin (Texas and New Mexico) and the Hugoton Basin (Texas and Kansas), as well as in California, Michigan and Illinois. In December 2013, Linn bought Berry Petroleum for $4.3 billion in stock. The move added long-lasting, mature properties and boosted Linn’s growth prospects. Berry’s reserves were roughly 75% oil. Linn’s shares have dropped lately, along with oil and gas prices, despite the fact that its average daily oil and gas production rose 51% in the third quarter of 2014 from a year earlier....
Every Tuesday we bring you “Best Canadian Stocks.” You get our specific recommendations on the stocks we profile, with a full explanation of how we arrived at our opinion. You’ll read about stocks making moves you should know about, from coverage in one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. ENBRIDGE INC. (Toronto symbol ENB; 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. Since 2008, Enbridge has spent $20 billion on 39 new pipelines and other projects. Thanks to these investments, the company’s revenue soared 164.1%, from $12.5 billion in 2009 to $32.9 billion in 2013. Its revenue probably increased to $37.7 billion in 2014....
IMPERIAL OIL $47.96 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $41.2 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.imperialoil.ca) expects to spend $4.0 billion on capital projects in 2015, down 29.8% from $5.7 billion in 2014. Most of that will go toward expanding its 71%-owned Kearl oil sands project, as well as its Cold Lake oil sands property. These two projects will last decades, so the recent drop in oil prices will have little impact on their long-term prospects. Imperial Oil is a buy.
ENCANA CORP. $15.20 (Toronto symbol ECA; Shares outstanding: 741.1 million; Market cap: $11.6 billion; TSINetwork Rating: Average; Dividend yield: 2.3%; www.encana.com) produced 416,700 barrels a day (74% gas, 26% oil) in the three months ended December 31, 2014. That’s down 20.4% from 523,400 barrels a year earlier. As well, Encana’s realized gas prices, which include the benefit of hedging contracts, fell 4.1%, while oil prices declined 0.9%. As a result, the company’s cash flow per share fell 44.0%, to $0.51 from $0.91. Encana plans to spend $2.0 billion to $2.2 billion on new projects and upgrades in 2015, down from its earlier forecast of $2.7 billion. Even so, that’s more than its projected cash flow of $1.4 billion to $1.6 billion....
ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $17.39 (New York symbol ESR; buy or sell through brokers) has 65.6% of its assets invested in Russia, followed by Poland at 27.2%; Czech Republic, 3.6%; and Hungary, 3.2%. The fund’s top holdings are Gazprom (Russia: gas utility), 13.4%; Lukoil (Russia: oil), 11.2%; Magnit PJSC (Russia: retailing), 5.7%; Sberbank (Russia: bank), 5.3%; MMC Norilsk Nickel (Russia: mining), 4.5%; and Novatek (Russia: natural gas), 3.5%. The iShares MSCI Emerging Markets Eastern Europe Index Fund’s expense ratio is 0.67%....
PENGROWTH ENERGY CORP. $4.15 (Toronto symbol PGF; Aggressive Growth and Income Portfolios, Resources sector; Shares outstanding: 530.2 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.8; Dividend yield: 5.8%; 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. Due to falling oil prices and Lindbergh’s completion, Pengrowth plans to spend $200 million to upgrade and maintain its properties in 2015, down 74.0% from $770 million last year. But even with the lower spending, Pengrowth expects to produce between 73,000 and 75,000 barrels a day (57% oil and liquids, 43% natural gas) in 2015, or about 1.5% more than in 2014, thanks to Lindbergh....