Royal Dutch Shell PLC (A) (RDS.A)

Pays a really healthy yield of about 6%. With the British pound being down, you are using your Cdn$ and will be able to get more shares. Thinks the dividend is sustainable, and this is probably a good place to hide. His view is that oil is going to be $40-$50, but once oil breaks $50 and heading towards $60, you may want to switch into another name that gives you a little bit more upside.

If you are going to have major integrated oil/gas companies, this is probably the premier one. Some people felt they paid quite a high price for Gas BG last year. They are now a major, major player in LNG gas.

He is zero weighted in oils, because he doesn’t think the long-term dynamics of oil pricing are going to be very good. Maybe there will be a deal with OPEC and the Russians to restrict output, but history shows us those deals don’t last very long or work very well. There is also the situation with all the fracers on the sideline patiently waiting for the opportunity to start producing again as soon as oil is above a reasonable price. If you couple that with the whole business of electric cars and the replacement of fossil fuels worldwide with alternative energy, he doesn’t think the dynamics of the oil business are that good.

If you own this, he thinks you’ll be fine. Everything works in a circle, oil and gas in particular. This is probably the best of the large cap oil companies. Very stable and very safe.

As the Cdn$ got so cheap, he was more concerned about buying things here first, in Cdn$ terms, because then he gets the bounce in Cdn$ which gives you a gain in oil, but also a currency kick.

One of the biggest energy companies globally. You have to ask if there is value here, and if you are trading or investing. Right now, from an investment standpoint, a lot of the stocks have recovered back to the area where they are pricing in $60 oil. He doesn’t see a lot of value in the energy sector today. Feels the sector is probably going to underperform for a long time. If oil goes back to $40 or less, that is the time you want to nibble at oil companies.

One of the big, global energy plays. It does look like energy is turning, which is the single most important driver for this company. Prefers Schlumberger (SLB-N). Feels the theme is very early, but the right stability factors seem to be in play. All these companies have technical formations that gets him interested. (See Top Picks.)

(A Top Pick Nov 4/14. Down 40.47%.) The only sector of the oil business that he likes are the large integrateds. This one has a massive dividend which is sustainable. They are generating free cash flow. If oil dropped to $20, he expects they would cut the dividend, but for 2016 this dividend is bullet proof, probably for 2017 as well. Companies like this are on the hunt looking for distressed assets to buy.

Dividend near 9%. Management keeps saying they will keep the dividend even if they have to sell assets. Ultimately if they have to cut, then they have to cut. This is a key risk. They are over distributing. They are spending more than the depreciation to maintain assets. On the plus side, they made an acquisition that has a lot of synergies, being accretive in a couple of years time. If you believe oil will firm up over the next couple of years then you could do very well in this one.

He is significantly underweight in energy. The only integrated oil stock he owns is Total (TOT-N). In the majors, this is the only one that has a good growth profile. Their assets are growing. They’re spending a lot of time focused on reducing costs. A very sensible CapX program, which should drive fairly good free cash flow, which is ultimately what he is looking at.

(Bought when Cdn$ was at par. Sell and convert back to Cdn$?) You probably made 30% on the currency, but you lost 30% on the stock. Sector is cheap now, so wouldn’t recommend selling, but would recommend buying. He would look to sell some of those and lock in the FX gain, but roll that exposure into a Canadian ETF like an XEG-T so that when oil recovers, you don’t have the currency risk.

You have to love the dividends. They are nice and steady. This one is relatively safe. The difficulty for all of these stocks is that there are just no flows into the sector yet.

One of the world’s biggest and this is one of the ones to own outside of Canada. The industry has headwinds because of oil prices and because of the oil and shale gas phenomenon. The costs of off shore oil exploration are very, very high. He owns very few oil and gas companies outside of Canada.

Sold his position about 18 months ago. On a relative basis, this company did fantastically well, compared to some of the higher growth names. It is very much a defensive stock. Dividend of about 5.8% is safe. Doesn’t expect there will be a sharp rebound in oil prices, so he would prefer being elsewhere. Prefers this over BP (BP-N).

The price of oil affects all these companies. Being a super major in this environment helps them. Small and mid cap stocks get hurt a lot more. RDS.A-N’s management has not been consistent. He is not sure if it is the best company if the price of oil turns around. It is hard to grow something like this. The currency has a huge impact on the story right now. Prefers Canadian companies like SU-T and CNQ-T.