Buyback plan enhances value

Article Excerpt

ENCANA CORP. $6.54 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.4 billion; Market cap: $9.2 billion; P/S ratio: 1.6; Divd. yield: 1.5%; TSINetwork Rating: Average; www.encana.com) operates shale oil and natural gas wells in B.C., Alberta, Texas, Oklahoma, North Dakota and Utah. The company plans to buy back up to $213 million U.S. of its common shares (about 3% of the total) through a Dutch auction process. Share repurchases raise earnings per share and other per-share calculations, which gives the remaining shareholders a larger stake in the company. Investors who want to participate must offer their shares for between $4.70 U.S. and $5.40 U.S. (in increments of $0.05 U.S.) before August 14, 2019. The final price will be the lowest amount within that range at which Encana can buy the most shares for $213 million U.S. The company will then pay that price for all shares tendered at or below it. If you tender at a higher price, Encana will return…

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