Their low debt cuts your energy risk

Article Excerpt

Oil and gas prices remain under pressure, but we still believe most investors benefit from maintaining some exposure to the industry as part of a balanced portfolio. Now more than ever, however, you should stick to producers with positive cash flow—despite low energy prices. That cuts your risk. Equally important, your energy picks should have sound balance sheets with manageable debt. Look also for companies paying dividends, like these two, which adds an extra layer of safety and helps support share prices. ARC RESOURCES, $6.06, is a buy for aggressive investors. This gas-weighted producer (Toronto symbol ARX; Shares outstanding: 354.2 million; Market cap: $2.2 billion; TSINetwork Rating: Speculative; Dividend yield: 9.9%; mines in Western Canada. Its average output of 147,650 barrels of oil equivalent per day is 76% natural gas and 24% oil. While cash flow in the quarter ended December 31, 2019, fell 16.9%, to $0.49 per share from $0.59 a year earlier, it nonetheless remained solid. The drop reflects lower natural gas…

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