Crescent Point Energy Corp (CPG.TO)

Crescent Point (CPG-T) or Whitecap (WCP-T)? Hasn’t cut its dividend for a while, and thinks they should cut. Wait until they make a decision on the dividend and look at it after that.

At the oil price he models, their dividend is sustainable. Debt to cash flow is pretty reasonable at about 2.2% at $50 oil. However, it is not sustainable at $30 oil. They do have some hedges for 2016-2017 below $40 oil. He doesn’t think any Canadian oil stocks are Buys here.

This company has great assets, and they are concentrated which is good. Also, has a good balance sheet. Their yield has gone up. They cut their dividend last year. If oil prices are $30 come the summer, they will likely cut their dividend again. If you have a 2-year horizon with this stock, he thinks you will be in good shape buying it here. He would rather buy when oil is $40 again, knowing that oil has bottomed.

Owns a little. For years he was a little jaundiced about the company, as they were really depending on their dividend reinvestment program to sustain what was a fairly large discipline. Over the last year or so, they really got religion and have cut back their dividend. Have also got much more disciplined about their capital programs. Recently announced that their forecasted budget for next year was going to be about 40% less then previously announced. On the positive side, this company owns great assets. If prices were better, they could be drilling for many, many years. Now is the time to be looking at this.

Stock vs. Stock. BTE-T vs. CPG-T. He would prefer CPG-T for its assets if a gun was to his head. It will still be there, but not sure if BTE-T will be around for long.

It has a lot of growth coming in production. If oil stays under $60 for a few more months a lot of their hedges would come off. The dividend is in question. It would be one of his favourites if oil did okay.

Now would not be a good time to get into it. They have a lot of hedges so have done well so far. Unless you get a really sharp recovery in the oil price, they will have a lot of problems when the hedges roll off. They already cut the divided. He is not comfortable with the sector at all.

His Top holding, and remains a mystery to him because it is materially cheaper than other names with inferior projects, balance sheets and dividend yields. Feels the dividend is safe. People are still hung up on the amount of paper they issued over the past few years. They did so to acquire a lot of properties. Management owns a lot of stock. In terms of quality, this company is in the top 10 in terms of quality in Canada.

Has a bit of this in some accounts. He likes this because it is not in Alberta and has a decent balance sheet. It has cut way back on its capital expenditures as well as its dividend. Not a bad one to own as far as oil stocks go.

It is a high quality company, but you have to appreciate that they have a lot of hedges in this year (50%) and only about 30% next year. He is not sure what the payout ratio will look like next year.

(A Top Pick Dec 29/14. Down 41.46%.) A fabulous company. They just have to cut their dividend finally. They are now down to $0.10 per month. Have suspended their DRIP. One of the best managed companies in Canada. It will come back, once we get oil stabilizing. He would put new money to work in this one.

If you are looking for yield, the current yield is sustainable. Cash flow and production were in line. His company has a $30 target on this. He would be getting ready to add, but would wait a little longer.

Near term, he sees short term downside from the commodity price. They will probably do some more acquisition rollups. Over time they do well and produce free cash flow. Over two years you will make money.

In the screen of investable mid-cap companies, this is #1 or #2 out of 5 that he likes. (See comments under Valeant (VET-T).) Still a fairly high valuation with WTI at $42. The nice thing about this is that it is in Saskatchewan and technically the chart looks pretty good. They should’ve cut their dividend to zero. This is generally a decent play on oil. He is looking at this one very closely.

6% dividend, Saskatchewan and Utah development. They have stopped diluting the momentum. It would be a lot of analysts’ favourite oil, including his. He sees a 50% gain.