Buy Crescent Point, hold on to Enerplus

Article Excerpt

CRESCENT POINT ENERGY CORP. $19.86 (Toronto symbol CPG; Shares outstanding: 498.3 million; Market cap: $9.4 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.0%; www.crescentpointenergy.com) produces oil and natural gas in Western Canada, with a focus on its Bakken light oil development in southeastern Saskatchewan. Its output is 91% oil and 9% gas. In the three months ended June 30, 2015, Crescent Point’s cash flow fell 17.7%, to $524.3 million from $636.7 million a year earlier. The company raised its daily output by 10.4%, but lower oil and gas prices offset that increase. Cash flow per share declined 26.5%, to $1.14 from $1.55, because the company issued shares to pay for acquisitions, including $1.5 billion for Legacy Oil + Gas in June 2015. Like many oil and gas producers, Crescent Point has cut back on exploration and development spending. This year, it will devote $1.45 billion to this purpose, down from $2.17 billion in 2014. Even with the lower spending, its…

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