Energy Stocks
Resource and commodity stocks in general should make up only a limited portion of your portfolio—say less than 20% for a conservative investor or as much as 30% for an aggressive investor. And as part of that segment, energy stocks could make up, say half of that total. The rest could be fertilizer stocks, mining stocks and so on.
Oil and gas stocks have been below-average performers lately, and many investors are tempted to get out of the industry altogether. However, the energy sector can play a crucial role in your portfolio as a hedge against inflation. The low inflation rates of the past couple of decades deserve some of the blame for the poor performance of the sector. However, energy stocks will likely rebound in years to come as the global economy recovers.
- Invest mainly in well-established companies;
- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
- Downplay or avoid stocks in the broker/media limelight.
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Energy Stocks Library Archives
Oil and gas stocks have moved up lately as the U.S. and other economies recover. We continue to recommend that most investors maintain some exposure to the oil and gas industry as part of a balanced portfolio. But to cut risk, you should stick with producers that have positive cash flow even at low energy prices....
Long-time readers know that we keep you informed of important news about the stocks we cover. That means highlighting developments or strategies that promise to brighten your prospects. Here are two buys that stand out this month:
THERMO FISHER SCIENTIFIC INC....
THERMO FISHER SCIENTIFIC INC....
Even though oil demand and prices continue to rebound from last year’s COVID-19-induced lows, Suncor’s shares have suffered. That’s partly due to problems that will delay the ramp-up of its Fort Hills oil sands project in northern Alberta. However, cost savings from Suncor’s takeover of the day-to-day operations of the Syncrude project should give it more cash for share buybacks and dividends.
SUNCOR ENERGY INC....
SUNCOR ENERGY INC....
CENOVUS ENERGY INC. $10 is a buy. The company (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.0 billion; Market cap: $20.0 billion; Price-to-sales ratio: 0.8; Dividend yield 0.7%; TSINetwork Rating: Extra Risk; www.cenovus.com) completed its acquisition of rival oil producer Husky Energy Inc....
IMPERIAL OIL LTD., $33.21, is a buy. The company (Toronto symbol IMO; Shares o/s: 711.7 million; Market cap: $24.9 billion; TSINetwork Rating: Average; Dividend yield: 3.0%; www.imperialoil.ca) is teaming up with four other oil sands operators in Alberta (Suncor, Cenovus, Canadian Natural Resources and MEG Energy) in an effort to cut their greenhouse gas emissions.
The five firms will connect their oil sands facilities in the Fort McMurray and Cold Lake regions to a central carbon sequestration hub....
IMPERIAL OIL LTD. $36 is also a buy. This company (Toronto symbol IMO; Conservative and Income Growth Portfolios, Resources sector; Shares outstanding: 734.1 million; Market cap: $26.4 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.6%; TSINetwork Rating: Average; www.imperialoil.ca) is teaming up with four other oil sands operators in Alberta (Suncor, Cenovus, Canadian Natural Resources and MEG Energy) in an effort to cut their greenhouse gas emissions.
The five firms will connect their oil sands facilities in the Fort McMurray and Cold Lake regions to a central carbon sequestration hub....
The five firms will connect their oil sands facilities in the Fort McMurray and Cold Lake regions to a central carbon sequestration hub....
Oil prices have almost doubled over the last year to today’s price of roughly $73 U.S. a barrel. Natural gas prices are up as well. Increased industrial activity is driving those gains as the world recovers from the pandemic.
Still, energy prices will likely remain subject to wide and unpredictable swings—spurred by continually changing supply and demand, environmental pressures, and the shift to electric vehicles....
Still, energy prices will likely remain subject to wide and unpredictable swings—spurred by continually changing supply and demand, environmental pressures, and the shift to electric vehicles....
CIMAREX ENERGY, $69.76 (New York symbol XEC; TSINetwork Rating: Extra Risk) (Shares o/s: 102.8 million; Market cap: $7.3 billion; Divd yield: 1.6%) is now merging with Cabot Oil & Gas (symbol COG on New York). The companies have yet to come up with a new name for the combined entity, which will be 50.5% owned by Cimarex....
OPEC recently announced that it would gradually increase oil production over the next few months. Despite the extra supply, oil prices rose on the news because industrial activity around the world continues to recover from the pandemic. Stable prices will also help Ovintiv with its plan to pay down its debt and so cut the risk for its shareholders.
OVINTIV INC....
OVINTIV INC....
CENOVUS ENERGY, $11.06, remains a buy for patient investors. The company (Toronto symbol CVE; Shares outstanding: 2.0 billion; Market cap: $21.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 0.6%; www.cenovus.com) has completed its acquisition of rival oil producer Husky Energy.
To help pay down the extra debt it assumed as part of the Husky deal, Cenovus is selling some of its less-important assets.
Those include a deal to sell the royalty rights to its Marten Hills oil assets in Alberta to Topaz Energy for $100 million....
To help pay down the extra debt it assumed as part of the Husky deal, Cenovus is selling some of its less-important assets.
Those include a deal to sell the royalty rights to its Marten Hills oil assets in Alberta to Topaz Energy for $100 million....