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
In 2017, OPEC plans to cut oil production by about 4.5%. That should help reduce the supply of oil and stabilize prices. It should also spur earnings for companies, such as ShawCor and Precision Drilling, that supply goods and services to oil producers.
SHAWCOR LTD. $34 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.6 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.7; Dividend yield: 1.8%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting....
SHAWCOR LTD. $34 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.6 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.7; Dividend yield: 1.8%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting....
PENGROWTH ENERGY CORP. $2.07 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 547.4 million; Market cap: $1.1 billion; Price-to-sales ratio: 2.2; Dividend suspended in January 2016; TSINetwork Rating: Speculative; www.pengrowth.com) produces oil and natural gas in Western Canada and off the coast of Nova Scotia.
The company continues to sell less-important assets as it focuses on its Lindbergh oil sands project in Alberta....
The company continues to sell less-important assets as it focuses on its Lindbergh oil sands project in Alberta....
ENCANA CORP. $16.87 (Toronto symbol ECA; Shares outstanding: 956.9 million; Market cap: $14.8 billion; TSINetwork Rating: Average; Dividend yield: 0.5%; www.encana. com) is one of North America’s largest producers of natural gas and oil.
The company continues to benefit from its plan to focus on four main properties: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas)....
The company continues to benefit from its plan to focus on four main properties: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas)....
ARC RESOURCES $23.52 (Toronto symbol ARX; Shares outstanding: 352.1 million; Market cap: $7.9 billion; TSINetwork Rating: Speculative; Dividend yield: 2.6%; www.arcresources.com) produces oil and natural gas in Western Canada.
ARC has now completed the sale of all of its properties in southeastern Saskatchewan for $700 million....
ARC has now completed the sale of all of its properties in southeastern Saskatchewan for $700 million....
PEYTO EXPLORATION & DEVELOPMENT CORP. $33.06 (Toronto symbol PEY; Shares outstanding: 164.6 million; Market cap: $5.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.0%; www.peyto.com) produces and explores for oil and natural gas in Alberta....
Oil prices have moved up from January 2016 lows. However, they are likely to remain volatile for the next year or two due to the slow-growing global economy and uncertainty over OPEC production cuts. We still like the long-term prospects of our two oil stocks—Chevron and Apache—but see only one as a buy for right now....
PASON SYSTEMS $16.32 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason. com; Shares outstanding: 84.4 million; Market cap: $1.4 billion; Dividend yield: 4.2%) serves the drilling contractors of oil and gas firms in Canada, the U.S., Mexico and Argentina....
Dear client,
Oil prices have moved up to $45 U.S. from their January 2016 low of $34. Even so, crude prices are likely to remain volatile over the next year or so.
We feel most investors will benefit from keeping about 10% to 15% of their stock portfolios in the resources sector.
We also recommend sticking to larger integrated oil producers such as Imperial Oil....
Oil prices have moved up to $45 U.S. from their January 2016 low of $34. Even so, crude prices are likely to remain volatile over the next year or so.
We feel most investors will benefit from keeping about 10% to 15% of their stock portfolios in the resources sector.
We also recommend sticking to larger integrated oil producers such as Imperial Oil....
While Imperial Oil (see page 111) is our top oil stock, we also like the outlook for these three industry firms.
They have all cut their costs, which should rapidly expand their earnings and cash flow as crude prices continue to recover. Moreover, their high-quality reserves should last decades.
SUNCOR ENERGY INC....
They have all cut their costs, which should rapidly expand their earnings and cash flow as crude prices continue to recover. Moreover, their high-quality reserves should last decades.
SUNCOR ENERGY INC....
PRECISION DRILLING CORP. $5.99 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 293.2 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.7; 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....