Shift to oil adds to Pengrowth’s appeal

Article Excerpt

PENGROWTH ENERGY CORP. $5.90 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 517.7 million; Market cap: $3.1 billion; Price-to-sales ratio: 1.9; Dividend yield: 8.1%; TSINetwork Rating: Average; www.pengrowth.com) produces oil and natural gas in Western Canada and off the Nova Scotia coast. Gas accounts for about 60% of its production; the other 40% is oil. Rising shale gas production in Canada and the U.S. increased supplies and cut prices from $8.19 per thousand cubic feet in 2008 to $2.38 in 2012. As a result, Pengrowth’s cash flow per share fell 67.1%, from $3.65 in 2008 to $1.20 in 2012. Due to writedowns and other unusual items, Pengrowth’s earnings have been erratic. Earnings dropped from $1.58 a share (or a total of $395.9 million) in 2008 to $0.32 a share (or $84.9 million) in 2009. Earnings rebounded to $0.76 a share (or $230.3 million) in 2010 but fell to just $0.03 a share (or $12.7 million) in 2012. New…

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