Canadian Natural Rsrcs (CNQ.TO)

Focused on heavy oil and acquisition related growth. They garner the most international interest. He took profits on CNQ-T recently but it is a great core name to own. RDS-N holds $4 Billion in CNQ-T and at some point he thinks they will put it back into the market. He would wait for that block to trade if it was going to, but who knows when.

She is not buying energy now because of her overall negative view of the Canadian energy market at this time. If she was going to buy at this time, she would buy a large producer and she would specifically prefer CNQ because it is well diversified, has a very strong balance sheet, and she likes its management.

CNQ-T vs SU-T. Both companies suffer from wider heavy oil differentials. He really likes CNQ over Suncor because it is gushing with free cash flow (he estimates $2.3 billion this year). CNQ Horizon expansion added 70,000 bpd of production. He owns CNQ bonds and equity. (Analysts’ price target for CNQ-T is $52 )

VET-T vs. CNQ-T. VET-T is trading a bit more expensively. She likes the CNQ-T story better from a valuation perspective.

Near its 52 week high but well above its lows. Until you see better pricing for Canadian heavy crude these stocks are going to have a hard time growing. We will probably see increased dividends.

(A Top Pick Feb 14/17. Up 20%.) WTI oil prices were up about 12% last year, and the E&P producers in Canada were down about 13%, but this company held its own. In terms of companies you want to own for the long-term producing energy, this is at the top of the list. Good dividend growth and free cash flow generation. This is a company that gets stronger while others are getting weaker.

This has been the one sector that hasn't really exploded in any way on the TSX, and we are currently dealing with the top level of its history. It’s a stock you would have to watch. It needs to get up through the $46 level and has had all kinds of problems doing it through the years. He would Sell at this level.

Canada’s energy sector is going to underperform the US. Most of what they do is oil and gas extraction: heavy oil from the oil sands. He is surprised valuation is holding up this much. He sees more downside risk than upside potential. You might be a dip buyer but it is not attractive at this point.

It has held up well. It is one of the trophy names out there. More than a million barrels a day. $7.9 and 8.3 $billion in cap-X programs. They are the biggest player out there. The stock is trading above book value and you want to buy it when it gets down there. It could get pulled back in Q1. He thinks we will see a recovery from tax loss selling and then a second low. Any new bull market in energy could go into 2022/3 after the lows early next year.

Canadian Natural Resources (CNQ-T) or Suncor (SU-T) for a longer outlook for gains? They are almost interchangeable. They are the 2 quality companies in the Canadian oil patch, and the 2 that have been able to purchase assets at good prices, while other companies were down. He owns both, and it is a coin toss as to which would do better in the next couple of years. He would be a buyer of both.

SU-T vs. CNQ-T. SU-T is a great company. With CNQ-T they are the two big guys in the field. He owns neither one but he would lean a little more to CNQ-T because of better valuation. The yield is not as great but they have more potential to bump the dividend up. Unit we get a better energy environment in Canada the growth will be limited.

What's a good blue-chip, dividend paying energy stock for a long term hold? He really, really likes this one, the best in class. Assuming oil ranges from $40-$60, this company is going to gush about $2.5 billion in free cash flow in 2018. They are going to pay down debt aggressively. They’ll also be increasing the dividend.

His outlook for 2018 is that oil and gas prices are going to remain range bound. Would prefer energy infrastructure instead of this company. He wants exposure to companies that are going to benefit from pulling the stuff out of the ground. That includes transporting it, fractionation for gas, logistics. Companies underpinned by “fee for service” or “take or pay” contracts have a lot more visibility and a lot less commodity price exposure. This wouldn’t be his favourite.

CNQ-T vs. SU-T. Both are up for the year because the profits are in refining. They will both generate significant cash flow. They could buy back shares or make an acquisition. Both are good for the long term but there could be weakness during tax loss selling. SU-T gives you refining stability and CNQ-T gives you oil sands growth.

The analysts and investors love this because of the size and growth. The Horizon project has done well. The stock has continued to do well, but he worries a little that Shell is going to come out on a short-term basis. He would be more inclined to take money out of this rather than buying. The valuation is a little more expensive than it is on juniors.