Two resource stocks: 1 buy & 1 hold

Article Excerpt

A new deal between OPEC, Russia and other big oil producers to limit output through the end of 2018 should help support current crude prices. That’s good news for Cenovus, which needs steady prices to pay down the debt it took on to gain full control of its two main oil sands properties. However, new drilling techniques continue to cut the costs for shale gas producers, in particular. That will likely spur more gas production, which is bad news for Encana. ENCANA CORP. $15 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 973.2 million; Market cap: $14.6 billion; Price-to-sales ratio: 3.8; Dividend yield: 0.5%; TSINetwork Rating: Average; has four key properties: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas). In addition to natural gas, these fields produce large amounts of oil and natural gas liquids. As part of Encana’s plan to focus on those core properties, it continues to sell its less-important operations. As…

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