Chevron Texaco (CVX)

(Market Call Minute) Large integrated company paying a nice yield.

Rates this as a low to medium risk stock. This is a lot like Suncor (SU-T), only a US version. Very consistent return on invested capital, fully integrated. It looks undervalued. 3.7% dividend yield. (Analysts’ price target is $124.13.)

He is a big believer in this. Thinks the dividend is sustainable. They have earned 10%, 12%, 8% consistently over time in that range. He thinks a lower return is priced into the stock right now. The lower return they are earning at the moment should rebound in the long run. Feels the dividend is sustainable.

A large integrated company based out of the US. An excellent long-term core holding. She tends to stay with Canadian ones for energy exposure. This company can take advantage of the low point in the cycle to buy assets at attractive prices. As a refiner, they benefit when commodity prices go down. Pretty good dividend yield of about 4.3%.

We need to concern ourselves with oil. The stock itself looks good. Chart shows a big volume and a big drop. He would be a seller at this point. The first number you have to worry about is a psychological one of $100.

Oil prices in the US kind of move opposite to the US$, giving you a kind of offset. Oil exposure in Canada moves truer to what oil prices actually are doing. This gives US companies less volatility. The dividend is this company’s #1 priority. They are looking more at divesting assets as opposed to buying opportunities, and are more focused on short cycle projects.

A very high quality integrated company. She has always chosen to stay in Canada for energy. This is a very large diversified name, and will be able to withstand the downturn. When times are difficult, they can probably scoop up assets at distressed prices.

He likes integrateds. The low is higher than in 2009. He would favour it. The volume has stopped the downtrend and it should start to rally.

The midstream and downstream operations have been very good. The upstream business has been very challenged. The big guys should continue to well. He prefers SU-T, however, who have no decline rate.

Good quality company. This makes a lot of sense if you want oil/gas exposure. She doesn’t have much exposure to the mega type companies, because the opportunity for adding value really starts to diminish. The larger they get they are forced to chase more and more marginal barrels. A relatively safe way to stay invested in the oil/gas space; however the opportunities for true valuation creation are much greater in some of the smaller companies.

Caller worried about holding for 5 years and finding the currency swing has cancelled out his gains in this one. Brian feels the Canadian dollar will max out at $0.85.

The 5% dividend is sustainable. The technical analysis is not supportive of plowing into energy at this point. He would prefer an E & P company. You have probably seen the lows in energy if oil does not go lower.

(A Top Pick Aug 15/14. Down 36.81%.) Still likes this, along with Exxon (XOM-N) and he would recommend both here. This is trading right on his model price. This has never traded at this cheap a valuation since 1995.

Bought this because of its diverse asset base. Their problem and why she bought into the stock, is their 2 big projects they are working on. Both are still in development and no production coming out of them. The company had a very strong history of generating good returns and have executed a lot of these large projects, so she bought into that fear expecting she would be fine. With the price of oil coming down, that has been problematic, because so much of their capital is tied up and committed to finishing the projects. This is going to be driven by the oil price.

Doesn't show the pattern he looks for. Indicators are low. Looks like it is oversold. Could look at the XLE-US which is the basket of the energy sector US ETF. Could add to this name or wait and see if the whole space is actually moving up and at the same time watch Chevron to see if it is going to catch up.