Steady cash flow cuts investors’ energy risk

Article Excerpt

The global economic slowdown resulting from the coronavirus has hit some industries especially hard. That includes airlines, hotels, casinos and restaurants—and oil and gas. But unlike many of those companies, the best energy stocks for investors continue to report positive cash flow. Equally important, your energy picks should have sound balance sheets with manageable debt. Look also for companies paying dividends, like these two, which adds an extra layer of safety and helps support their share prices. ARC RESOURCES $5.63 (Toronto symbol ARX; Shares outstanding: 353.4 million; Market cap: $2.0 billion; TSINetwork Rating: Speculative; Dividend yield: 4.3%; www.arcresources.com) produces natural gas in Western Canada as well as oil. Its average output of 151,783 barrels of oil equivalent per day is 76% natural gas and 24% oil. While cash flow in the quarter ended March 31, 2020, fell 13.2%, to $0.46 per share from $0.53 a year earlier, it nonetheless remained solid. The drop reflects lower natural gas and oil prices, which offset a 9.2% jump…