These two producers are cash flow bargains

Article Excerpt

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 have positive cash flow even in times of low energy prices. Here are two that meet that requirement. Moreover, they pay high dividends: PEYTO EXPLORATION & DEVELOPMENT, $12.69, is a buy for aggressive investors. This producer (Toronto symbol PEY; Shares outstanding: 175.1 million; Market cap: $2.3 billion; TSINetwork Rating: Extra Risk; Dividend yield: 10.4%; www.peyto.com) focuses on both gas and oil in Alberta. Its production is 89% gas and 11% oil. In the quarter ended September 30, 2023, output fell 5.9%, to 97,981 barrels of oil equivalent per day from 104,071 a year earlier. The company held back drilling as energy prices softened. Cash flow dropped 27.0%, to $0.84 a share from $1.15. The lower production and reduced oil and…