These two are cheap in relation to cash flow

Article Excerpt

The global economic slowdown resulting from the coronavirus has hit some industries especially hard. That includes airlines, hotels, casinos and restaurants—and oil and gas. But unlike many of those companies, the best energy stocks for investors continue to report positive cash flow. 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 their share prices. ARC RESOURCES, $5.94, (Toronto symbol ARX; Shares outstanding: 353.4 million; Market cap: $2.1 billion; TSINetwork Rating: Speculative; Dividend yield: 4.0%; www.arcresources.com) produces natural gas in Western Canada as well as oil. Its average output of 158,444 barrels of oil equivalent per day is 74% natural gas and 26% oil. Cash flow in the quarter ended September 30, 2020 was unchanged at $0.41 from a year earlier. Higher gas output and prices offset lower oil prices. The company’s long-term debt stands at $674.0 million, or a manageable 32% of its…