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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We continue to advise that all investors maintain some exposure to the oil and gas industry. To further cut your risk, stick with integrated producers like Suncor and Imperial oil, particularly as their cost-cutting plans should give them more room for dividend increases.
SUNCOR ENERGY INC… Read More
VEREN INC., $10.74, is a buy for aggressive investors. The company (Toronto symbol VRN; Shares outstanding: 619.5 million; Market cap: $6.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.3%; www.vrn.com) is the new name of Crescent Point Energy Corp.
The company has rebranded to highlight its new focus on two key… Read More
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… Read More
IMPERIAL OIL LTD. $96 is a buy. The company (Toronto symbol IMO; Conservative and Income Growth Portfolios, Resources sector; Shares outstanding: 604.8 million; Market cap: $58.1 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.5%; TSINetwork Rating: Average; www.imperialoil.ca) produced an average 421,000 barrels of oil equivalent per day in… Read More
CENOVUS ENERGY, $27.99, is a buy for long-term gains. The company (Toronto symbol CVE; Shares outstanding: 1.9 billion; Market cap: $52.4 billion; TSINetwork Rating: Average; Dividend yield: 2.0%; www.cenovus.com) sends most of its crude oil production to its 50%-owned oil refineries in Illinois and Texas. Phillips 66 (New York… Read More
Here are two of our top safety-conscious recommendations. Both have growth ahead. Look for that to spur their share prices and your returns.
BCE INC., $45.76, is a buy. The company (Toronto symbol BCE; Shares outstanding: 912.3 million; Market cap: $41.8 billion; TSINetwork Rating: Above Average; Dividend yield:… Read More
Demand for Major Drilling’s specialized services has now mostly recovered. Meanwhile, Computer Modelling is benefiting from expanding oil and gas drilling in response to overall higher energy prices. We think there are still gains ahead for both stocks.
MAJOR DRILLING, $9.68, is a buy. This large contract… Read More
In addition to Suncor (see page 41), we also like the outlook for these three oil producers. Like Suncor, they have used their stronger cash flows in the past few years to pay down debt. That is giving them more room for dividend increases and… Read More
According to the International Energy Agency, global oil demand grew by 2.3 million barrels per day in 2023 to 103 million barrels. The agency now expects oil use to increase by 1.3 million barrels a day in 2024. That higher demand has helped push up… Read More
METRO INC., $71.12, is a buy. The company (Toronto symbol MRU; Shares outstanding: 227.0 million; Market cap: $16.3 billion; TSINetwork Rating: Average; Dividend yield: 1.9%; www.metro.ca) will close its produce distribution centre based in Ottawa in May. That’s part of its plan to modernize its networks in Ontario and… Read More
IMPERIAL OIL LTD., $97.84, is a buy. The company (Toronto symbol IMO; Shares o/s: 535.8 million; Market cap: $51.7 billion; TSINetwork Rating: Average; Dividend yield: 2.5%; www.imperialoil.ca) gets over 90% of its production from oil sands operations in Alberta. Imperial also has conventional oil and natural gas operations… Read More
We recommend that most investors maintain some exposure to the oil and gas industry as part of a balanced portfolio. That’s mainly because it offers a hedge (some protection) against inflation.
To further cut your risk, you should focus mainly on high-quality producers, like Chevron, with… Read More
CENOVUS ENERGY INC. $24 is a buy. The country’s third-largest oil producer (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.9 billion; Market cap: $45.6 billion; Price-to-sales ratio: 0.8; Dividend yield 2.3%; TSINetwork Rating: Average; www.cenovus.com) plans to spend between $4.5 billion and $5.0 billion on… Read More
CENOVUS ENERGY, $23.42, is a buy for long-term gains. The company (Toronto symbol CVE; Shares o/s: 1.9 billion; Market cap: $44.4 billion; TSINetwork Rating: Average; Yield: 2.4%; www.cenovus.com) expects to spend between $4.5 billion and $5.0 billion on exploration and upgrades in 2024. That’s up from its likely 2023… Read More
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… Read More
ENERPLUS CORP., $23.98, (Toronto symbol ERF; Shares outstanding: 203.3 million; Market cap: $4.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 1.4%) produces oil and gas mostly from properties in the Bakken area of North Dakota, the DJ Basin in Colorado, and the Marcellus Shale in Pennsylvania.
The company’s shares… Read More
BIRCHCLIFF ENERGY, $4.82, is a buy. The company (Toronto symbol BIR; TSINetwork Rating: Speculative) (Shares outstanding: 266.6 million; Market cap: $1.3 billion; Dividend yield: 8.3%) has cut your quarterly dividend by 50.0% due to lower natural gas prices. With the March 2024 payment, investors will receive $0.10 a share… Read More
These two oil producers continue to increase their production. That will let them take advantage of the expansion of the TransMountain pipeline, which pumps crude from Alberta to the B.C. coast. The new line will let them sell crude at higher prices than oil shipped… Read More
CENOVUS ENERGY, $21.78, is a buy for long-term gains. The company (Toronto symbol CVE; Shares o/s: 1.9 billion; Market cap: $41.8 billion; TSINetwork Rating: Average; Yield: 2.6%; www.cenovus.com) has formed a new joint venture with Athabasca Oil (Toronto symbol ATH) to manage their properties in the Kaybob Duvernay region… Read More