Canadian Natural Rsrcs (CNQ.TO)

Most of their CAPEX is behind them, so they're enjoying cash flow, paying down debt and increasing their 3.6% yield. Not very expensive. Doing selective acqusitions. Will do even better when the gas price returns. (Analysts' price target $51.83)

CNQ-T versus SU-T. They both rank well in his model. In a rising interest rate world, energy stocks do well. CNQ ranks slightly higher as share earnings will grow 100% in 2018 with a 16 times P/E. He does not own either stock.

He is constructive on the oil price. As demand season picks up here and as differentials narrow, it will be good for them. The free cash flow is going north. They are through the Horizons build. They had a 20% dividend increase. The stock is down year to date, so it is a good level to be accumulating. (Analysts’ target: $51.94).

Good long-term core position. Increased their dividend. The business is doing fine. All energy stocks have come off lately, but CNQ is one of the best ones.

This is the only large-cap oil company he owns. He has preferred CNQ and Suncor for a while, as the two large-cap oil companies to own. CNQ is a better business than Husky Energy. It has a better cash-flow than Husky.

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.