Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered 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

Energy Stocks

Merger has big advantages

PRECISION DRILLING CORP. $4.13 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 293.2 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.9; Dividend suspended in March 2016; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract drilling services to land-based oil and gas producers, mainly in North America....

1 min read

Pat McKeough

Energy Stocks

Cenovus ships by rail

CENOVUS ENERGY $13.42 (Toronto symbol CVE; Shares outstanding: 1.2 billion; Market cap: $16.5 billion; TSINetwork Rating: Average; Dividend yield: 1.5%; www.cenovus.com) has signed three-year deals with CN Rail (symbol CNR on Toronto) and CP Rail (symbol CP on Toronto) to transport 100,000 barrels per day of crude from Northern Alberta to the U.S....

1 min read

Pat McKeough

Energy Stocks

Bonavista and Peyto are both buys

BONAVISTA ENERGY $1.47 (Toronto symbol BNP; Shares outstanding: 255.4 million; Market cap: $375.5 million; TSINetwork Rating: Speculative; Dividend yield: 2.7%; www.bonavistaenergy.com) explores for oil and gas across B.C., Alberta and Saskatchewan....

2 min read

Pat McKeough

Energy Stocks

IMO’s expansion pays off

IMPERIAL OIL LTD. $43.70 (Toronto symbol IMO; Shares o/s: 802.7 million; Market cap: $34.8 billion; TSINetwork Rating: Average; Dividend yield: 1.7%; www.imperialoil.ca) has already seen the benefits of recent expansions at its Kearl oil sands property....

1 min read

Pat McKeough

Energy Stocks

Two big buys pay off

PARAMOUNT RESOURCES $13.61 (Toronto symbol POU; TSINetwork Rating: Speculative) (403-290-3600; www.paramountres.com; Shares outstanding: 132.2 million; Market cap: $1.8 billion; No dividends paid) owns oil and gas properties in Alberta and B.C.

The company completed two big transactions in the 2017 third quarter....

1 min read

Pat McKeough

Energy Stocks

Rising oil prices are key to their success

World oil prices have gained 15% since the start of 2018, and could go higher as the improving global economy continues to spur demand.

Higher oil prices will benefit both Pengrowth and Precision Drilling, and help them pay down their high debt loads....

2 min read

Pat McKeough

Energy Stocks

Imperial is still our top oil pick

Imperial Oil has already seen the benefits of recent expansions at its Kearl oil sands property. The company is also doing a good job of controlling its operating costs.

Still, its focus on Canada adds risk. Specifically, a lack of new pipeline capacity continues to depress prices for Canadian producers compared to the crude prices for producers in the U.S....

4 min read

Pat McKeough

Energy Stocks

Cenovus is a top oil buy

CENOVUS ENERGY $11.83 (Toronto symbol CVE; Shares o/s: 1.2 billion; Market cap: $14.5 billion; TSINetwork Rating: Average; Dividend yield: 1.7%; www.cenovus.com) acquired 100% of its main oil sands properties in Alberta in May 2017. It did that through the purchase of the 50% stake held by its partner in the project, ConocoPhillips (New York symbol COP), for $17.7 billion in cash and stock.

In the quarter ended June 30, 2018, the company’s cash flow rose 3.9%, to $774 million from $745 million....

1 min read

Pat McKeough

Energy Stocks

Higher oil is a big plus for these producers

ENERPLUS CORP. $15.47 (Toronto symbol ERF; Shares outstanding: 244.8 million; Market cap: $3.7 billion; TSINetwork Rating: Speculative; Dividend yield: 0.8%) produces oil and gas from properties in Western Canada—Alberta, Saskatchewan and B.C.—as well as North Dakota and Montana....

2 min read

Pat McKeough

Energy Stocks

Drilling rebound brightens their outlook

ENERFLEX LTD. $16.30 (Toronto symbol EFX; TSINetwork Rating: Extra Risk) (403-387-6377; www.enerflex.com; Shares outstanding: 88.6 million; Market cap: $1.4 billion; Dividend yield: 2.3%) rents and sells equipment and services for natural gas production....

2 min read

Pat McKeough

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Browse Premium Topics

Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.