Topic: How To Invest

Pat: Could you comment on Canadian Oil Sands? It has a good dividend and a large asset base. Thanks for your help.

Article Excerpt

Canadian Oil Sands, $20.42, symbol COS on Toronto (Shares outstanding: 484.6 million; Market cap: $9.9 billion; www.cdnoilsands.com), has a 36.74% stake in Syncrude Canada Ltd. Canadian Oil Sands’ share of Syncrude’s oil production is about 109,000 barrels a day. In the three months ended March 31, 2013, Canadian Oil Sands produced 95,683 barrels of oil equivalent per day, down 11.4% from 108,108 barrels a year earlier. That’s because Syncrude’s oil extraction and processing facilities experienced several unplanned outages. These issues are now resolved. The production drop, as well as lower oil prices, pushed down Canadian Oil Sands’ cash flow per share by 39.4% in the latest quarter, to $0.57 from $0.94 a year earlier. The company’s balance sheet its sound: its debt of $1.5 billion is a low 15.2% of its market cap. It also holds cash of $1.5 billion, or $3.10 a share. Canadian Oil Sands’ focus on high-cost oil sands production exposes it to more uncertainty than other high-quality oil companies and…