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
SUNCOR ENERGY INC. $57 is a buy. Canada’s largest integrated oil producer (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.3 billion; Market cap: $74.1 billion; Price-to-sales ratio: 1.4: Dividend yield: 4.0%; TSINetwork Rating: Average; www.suncor.com) put out a record 827,000 barrels a day in 2024, up 10.9% from 746,000 barrels in 2023....
The best way for investors to cut the risk of Resources holdings is to focus on producers with high-quality reserves, like Ovintiv. The company’s recent deal to increase its presence in the large Montney region should also spur its cash flow over the next few years.
OVINTIV INC....
OVINTIV INC....
IMPERIAL OIL LTD., $95.25, is a buy. The company (Toronto symbol IMO; Shares outstanding: 523.4 million; Market cap: $49.5 billion; TSINetwork Rating: Average; Dividend yield: 2.5%; www.imperialoil.ca) gets over 90% of its production from oil sands operations in Alberta....
Oil giant Chevron recently won U.S. regulatory approval for its deal to buy smaller rival Hess Corp. While expanding by acquisition adds risk, the new operations will add several promising properties to Chevron’s reserves. The extra cash flow will also let the oil giant keep raising your dividend—something it’s done each of the past 37 years.
CHEVRON CORP....
CHEVRON CORP....
COMPUTER MODELLING GROUP, $10.90, is a buy. The company (Toronto symbol CMG; TSINetwork Rating: Extra Risk) (www.cmgl.ca; Shares outstanding: 82.2 million; Market cap: $895.4 million; Dividend yield: 1.8%) is now acquiring Sharp Reflections GmbH for $37 million.
Sharp is headquartered in Germany, with operations in the U.S....
Sharp is headquartered in Germany, with operations in the U.S....
We still recommend that most investors maintain exposure to the oil and gas industry as part of a balanced portfolio. To cut risk, focus on producers with positive cash flow even at lower energy prices. Here’s one that meets that requirement—and pays a solid dividend.
COTERRA ENERGY, $24.52, is a buy. The company (New York symbol CTRA; TSINetwork Rating: Extra Risk) (www.coterra.com; Shares outstanding: 736.4 million; Market cap: $18.2 billion; Dividend yield: 3.4%) produces and explores for natural gas and oil....
CENOVUS ENERGY INC. $22 is a buy. Canada’s third-largest oil producer (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.8 billion; Market cap: $39.6 billion; Price-to-sales ratio: 0.7; Dividend yield 3.3%; TSINetwork Rating: Average; www.cenovus.com) expects to spend between $4.5 billion and $5.0 billion in 2024 on exploration and upgrades.
Those investments will lift the company’s full-year output to between 785,000 and 810,000 barrels a day (its oil sands projects in Alberta account for 76% of that total)....
IMPERIAL OIL, $100.29, is a #1 Buy for 2024. The company (Toronto symbol IMO; Shares o/s: 523.4 million; Market cap: $53.6 billion; TSINetwork Rating: Average; Yield: 2.4%; www.imperialoil.ca) gets about 99% of its production from oil sands operations in Alberta....
OVINTIV INC., $59.96, is a buy. The energy producer (Toronto symbol OVV; Shares outstanding: 260.3 million; Market cap: $16.2 billion; TSINetwork Rating: Average; Dividend yield: 2.7%) operates four core oil and gas properties: Montney (B.C.), Permian (Texas), Anadarko (Oklahoma) and Uinta (Utah).
Ovintiv recently agreed to acquire certain assets in the Montney region from Paramount Resources Ltd....
Ovintiv recently agreed to acquire certain assets in the Montney region from Paramount Resources Ltd....
The shares of oil and gas stocks remain high as energy demand stays strong. 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 in times of low energy prices....