These integrated producers cut your risk

Article Excerpt

We continue to recommend conservative investors limit their oil holdings to integrated producers such as these three. Their upstream (or producing) businesses benefit from higher crude prices. Their downstream (refining) businesses, on the other hand, convert crude into gasoline and other fuels and so profit when oil prices fall. That balance helps moderate your risk. SUNCOR ENERGY INC. $28 is a buy. The company (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $42.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.0%; TSINetwork Rating: Average; www.suncor.com) is Canada’s largest integrated oil firm, with major projects in the Alberta oil sands. Those properties should last 29 years. Just as important, investors tap the company’s four refineries (three in Canada and one in Colorado), along with 1,875 Petro-Canada gas stations. Oil prices have improved along with the start of the economic recovery. As a result, Suncor’s average daily oil production in the three months ended March 31, 2021, rose 6.2%, to…

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