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

Higher spending will boost their 2017 output

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....

2 min read

Pat McKeough

Energy Stocks

When it comes to oil stocks, stick with quality

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....

2 min read

Pat McKeough

Energy Stocks

Research spending keeps them on top

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....

2 min read

Pat McKeough

Energy Stocks

Cut your oil risk with Imperial

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....

4 min read

Pat McKeough

Energy Stocks

We also like these top oil producers

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....

6 min read

Pat McKeough

Energy Stocks

Precision Drilling ups capital spending

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....

1 min read

Pat McKeough

Energy Stocks

Encana ups its spending

ENCANA $12.49 (Toronto symbol ECA; Shares outstanding: 956.9 million; Market cap: $12.4 billion; TSINetwork Rating: Average; Dividend yield: 0.6%; www.encana.com) focuses on four key projects: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas)....

1 min read

Pat McKeough

Energy Stocks

Asset sales to fuel growth for these producers

ENERPLUS CORP. $9.05 (Toronto symbol ERF; Shares outstanding: 240.5 million; Market cap: $2.3 billion; TSINetwork Rating: Speculative; Dividend yield: 1.3%) produces oil and gas from properties in Western Canada—Alberta, Saskatchewan and B.C.—as well as North Dakota and Montana in the western U.S....

2 min read

Pat McKeough

Energy Stocks

Buy these two oil and gas stocks

BIRCHCLIFF ENERGY $9.63 (Toronto symbol BIR; TSINetwork Rating: Speculative) (403-261-6401; www.birchcliffenergy.com; Shares outstanding: 263.0 million; Market cap: $2.4 billion; No dividends paid) explores for, develops and produce oil and gas, mainly in the Peace River Arch area near the Alberta-B.C....

2 min read

Pat McKeough

Energy Stocks

Cenovus will survive the oil slump

CENOVUS ENERGY INC. $20 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 833.2 million; Market cap: $16.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.0%; TSI Network Rating: Average; www.cenovus.com) gets 35% of its revenue from its Western Canadian oil sands properties and conventional oil and gas wells.

Its biggest properties are its 50%-owned Christina Lake and Foster Creek oil sands projects; Conoco Philips (New York symbol COP) owns the remaining 50%.

Refineries temper Cenovus’s risk

Refining supplies the remaining 65% of Cenovus’s revenue....

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.