Two gas buys for growth and income

Article Excerpt

Natural gas prices are now at $4.72 U.S. per thousand cubic feet, up 159% from their low of $1.82 in April 2012. The long-term outlook for gas remains positive, but prices could move sideways, or even downward, in the short term. The best way to profit with less risk is to invest in companies that are steadily increasing their production and cash flows. Here are two producers with strong growth prospects and attractive dividend yields. ARC RESOURCES $32.52 (Toronto symbol ARX; Shares outstanding: 314.9 million; Market cap: $10.4 billion; TSINetwork Rating: Speculative; Dividend yield: 3.7%; www.arcresources.com) produces oil and natural gas in Western Canada. Its average daily output of 100,883 barrels of oil equivalent is weighted 59% to gas and 41% to oil. In the three months ended December 31, 2013, ARC’s cash flow per share rose 11.8%, to $0.76 from $0.68 a year earlier. Production gained 5.4%, and the company’s realized gas price rose 8.7%. Oil prices increased 2.9%. ARC’s long-term debt is $859.2…