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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BIRCHCLIFF ENERGY, $10.13, is a buy. The company (Toronto symbol BIR; TSINetwork Rating: Speculative) (Shares o/s: 266.0 million; Market cap: $2.6 billion; Dividend yield: 0.4%) reports that its cash flow in the quarter ended December 31, 2021, jumped sharply, to $0.73 a share from $0.25 a year earlier. The… Read More
CENOVUS ENERGY INC. $21 is a buy. The company (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 2.0 billion; Market cap: $42.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 0.7%; TSINetwork Rating: Extra Risk; www.cenovus.com) plans to cut its annual greenhouse gas emissions 35% by the end… Read More
Canada’s federal government recently announced new greenhouse gas (GHG) reduction targets. Those include cutting emissions from oil and gas producers by 42% before 2031. That new target is more aggressive than Suncor’s or Imperial Oil’s own plan. Even so, meeting it is unlikely to severely… Read More
Oil and gas stocks have moved up lately as the U.S. and other economies recover—and with the Ukraine conflict. 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… Read More
Oil and gas stocks have moved up as the U.S. and other economies recover. The war in Ukraine has also driven up prices. We recommend that most investors maintain exposure to the oil and gas industry as part of a balanced portfolio. But to cut risk,… Read More
Oil prices continue to strengthen as COVID-19 travel and other restrictions ease. Despite new government regulations to limit carbon emissions, crude prices will remain elevated as producers like Chevron focus on improving their efficiency instead of increasing production. That should keep pushing up the share… Read More
Oil and gas prices have moved up lately. But the future direction of energy prices depends on a lot of things, particularly economic growth rates around the world in the wake of COVID-19. Meanwhile, though, well-established companies in the industry took advantage of the earlier… Read More
In addition to Cenovus (see page 21), we also like the outlook for these three leading oil producers. All of them are using their improving cash flows to pay down debt, which helps protect them if crude prices weaken. As well, each is raising its… Read More
Despite volatile crude prices, we continue to advise all investors to maintain some exposure to the oil and gas industry. That advice reflects oil’s huge importance to global economic growth even as governments impose new regulations to cut carbon emissions.
We also recommend investors stick with… Read More
IMPERIAL OIL LTD., $54.44, is a buy. The company (Toronto symbol IMO; Shares o/s: 695.6 million; Market cap: $38.1 billion; TSINetwork Rating: Average; Dividend yield: 2.5%; www.imperialoil.ca) is Canada’s third-largest publicly traded oil company after Canadian Natural Resources (No. 1) and Suncor. U.S.-based ExxonMobil (New York symbol XOM)… Read More
APA CORP. $33 remains a hold. The company (New York symbol APA; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 363.3 million; Market cap: $12.0 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.apacorp.com) produces oil and natural gas in the U.S., Egypt and the U.K.
APA operates… Read More
COMPUTER MODELLING GROUP, $4.40, is still a buy. The company (Toronto symbol CMG; TSINetwork Rating: Extra Risk) (www.cmgl.ca; Shares o/s 80.3 million; Market cap: $353.5 million; Dividend yield: 4.6%) reports that in the three months ended September 30, 2021, its revenue fell 10.7%, to $15.9 million from $17.9… Read More
CENOVUS ENERGY, $16.58, remains a buy for long-term gains. The company (Toronto symbol CVE; Shares outstanding: 2.0 billion; Market cap: $32.9 billion; TSINetwork Rating: Extra Risk; Dividend yield: 0.8%; www.cenovus.com) continues to sell less-important assets to pay down the debt it took on as part of the Husky acquisition.
On… Read More
Oil and gas stocks have moved up lately as the U.S. and other economies recover. 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… Read More
IMPERIAL OIL LTD., $46.58, is a buy. The company (Toronto symbol IMO; Shares o/s: 695.6 million; Market cap: $32.8 billion; TSINetwork Rating: Average; Dividend yield: 2.3%; www.imperialoil.ca) is Canada’s third-largest publicly traded oil company after Canadian Natural Resources (No. 1) and Suncor. U.S.-based ExxonMobil (New York symbol XOM)… Read More
Oil and gas stocks have moved up as the U.S. and other economies recover. We continue to recommend that most investors maintain exposure to the oil and gas industry as part of a balanced portfolio. But to cut risk, you should stick with producers that have… Read More
Oil and gas stocks have moved up lately as the U.S. and other economies recover. Birchcliff Energy shares have almost tripled over the last year. Still, the shares remain cheap for investors looking to profit from a continuing energy rebound.
BIRCHCLIFF ENERGY, $7.63, is a buy. The company… Read More
DEVON ENERGY, $42.29, is a buy. The company (New York symbol DVN; TSINetwork Rating: Extra Risk) (www.dvn.com; Shares outstanding: 677.0 million; Market cap: $29.4 billion; Dividend yield: 1.0%) now pays out as much as 50% of its excess free cash flow in dividends. That’s in addition to the… Read More
Oil stocks continue to rebound from their 2020 lows as the re-opening of the global economy pushes oil and gas prices to multi-year highs. We feel those prices will remain elevated, as producers focus on improving their efficiency instead of spending more on exploration given… Read More
CENOVUS ENERGY, $15.03, remains a buy for long-term gains. The company (Toronto symbol CVE; Shares outstanding: 2.0 billion; Market cap: $30.0 billion; TSINetwork Rating: Extra Risk; Dividend yield: 0.5%.; www.cenovus.com) continues to sell less-important properties to pay down debt.
The cash from those sales will help cut Cenovus’s net debt… Read More
