Oil and Gas Companies

I guess the question is, are oil and gas companies good long term investments, especially for investors that want dividend income? There seems to be two types of companies. Ones like Suncor Energy (TSX-SU) that pays very low (around ½ of 1%) but increasing dividends. You would make most of your money from Capital Gain. Then there are ones like Canadian Oil Sands (TSX-COS) that give you very good dividends, a a large part of what you get in returns is dividends. However, for these company, dividends will fluctuate with price of oil and gas.

The following are the companies in the oil and gas industry that I follow. For all the stock I follow, I have shown the link to my blog entries. The first blog entry should help you answer the questions of whether or not you might like to invest in the stock.

The 2nd blog entry deals with its current price, but you can compare the past median values to current ones to see if you would want to invest in it today. For example, you can compare current P/E Ratios from financial sites to the median P/E Ratios given in my blog. The G&M and Reuter can both give you current ratios. For Reuter, use TO after the stock symbol to find stock listings for Canadian companies. For AltaGas would be the symbol of “ALA.TO”.

AltaGas Ltd (TSX-ALA). This company was an income trust. Dividend yield is good, and after the decrease on change to corporation, the company expects the dividends to be stable or increase. DPRs are high, especially for EPS, but are coming down. Growth is good over the past 10 years, but not past 5 years. For my blog entries dated April 2011, click here or here.

ARC Resources Ltd. (TSX-ARX). This company was an income trust. Dividend yield is good, but will fluctuate with price of oil and gas. DPRs are high for EPS, but are coming down. Neither 5 nor 10 year growth is good for revenue, earnings or cash flow. For my blog entries dated September 2011, click here or here.

Canadian Natural Resources (TSX-CNQ). Dividend yield is very low, but grows. Like Suncor, the dividends are so low, I wonder about calling it a dividend paying stock. DPRs are very low. Growth is better for 10 years than 5 years, but both shows growth. Also, like Suncor, there has been an awful lot of insider selling over past year. For my blog entries dated July 2011, click here or here.

Canadian Oil Sands Trust (TSX-COS). This company was an income trust. Dividend yield is good, but will fluctuate with price of oil. DPRs are currently good. Good growth over last 10 years, but not such much for last 5 years. For my blog entries dated blog dated Oct 2011, click here or here.

Cenovus Energy Inc (TSX-CVE). Dividend yield is not bad and it has grown over past 5 and 10 years. The DPR is fine. Revenues have been growing, but EPS and cash flow have not. However, there has been not negative EPS or Cash Flows. For my blog entries dated October 2011, click here or here.

EnCana Corp (TSX-ECA). Dividend yield is good, but it has fluctuated. But dividends have also grown over past 5 and 10 years. The DPR is mostly fine; however, the DPR for EPS will be high over the next couple of years because earnings are expected to be low. DPR for cash for is just fine. There has been some growth, especially over the past 10 years. For my blog entries dated October 2011, click here or here.

Ensign Energy Services (TSX-ESI). This is an oil and gas servicing company. Dividend yield is decent and is growing very well. The DPR is good. There has been growth over the past 10 years, but not much over the past 5 years. For my blog entries dated October 2011, click here or here.

Husky Energy (TSX-HSE). Dividend yield quite good and is growing, although it also does fluctuate with the price of oil. The DPR is fine. Revenues have been growing over the past 5 and 10 years. However earnings and cash flow have grown over the past 10 years, not over the past 5 years. For my blog entries dated July 2011, click here or here.

Keyera Corp (TSX-KEY), This company was an income trust. Dividends are good and they have been increasing. DPR is currently fine, but the one for earnings have been rather high in the past. Revenue, earnings and cash flow have all been growing. For my blog entries dated August 2011, click here or here

Penn West Petroleum (TSX-PWT. Dividends are good on this company, but they have fluctuated a great deal. DPR is quite high looking at from an EPS standpoint; however they are improving greatly from a cash flow standpoint. There hasn't been much growth over past 5 and 10 years for revenues, earnings or cash flow. However, there was only one year of negative EPS and none for cash flow. They have an awful lot of insider selling over past year. For my blog entries dated Oct 2011, click here or here.

Suncor Energy (TSX-SU). Not really a dividend paying company has the dividend yield is usually below 1%. The good thing about the dividend is that it does not fluctuate with the price of oil. DPR is at a great low level for both EPS and cash flow. There has been good growth in revenues and earnings, but not for cash flow. However, there are no years of negative cash flows. This company had a lot of insider selling over past year. For my blog entries dated Oct 2011, click here or here.

The site Canadian Oil Stock.ca talks about some of these oil and gas stocks.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.