Suncor Energy Inc (SU.TO)

He owns CNQ instead. These two are the ones you want to own with the volatility in the oil market. They both have the ability to manage through this and have a chance to buy a bunch of assets. The smaller caps are just fighting to live another day. Risk that oil can go lower.

Energy stocks? Right now stick to the large, liquid energy stocks. There is growing concern of counter-party credit exposure within the mid-stream and pipeline space. He recommends ENB-T and TRP-T for pipelines and SU-T and CNQ-T for producers, if you want to own any energy stocks. SU-T yield is 7.2%, while CNQ-T is 8.4%. CNQ-T is probably still showing positive cash flow, even at these oil price levels. You may still lose money, but it will be much less than a smaller player.

Suncor is a good buy, but so is CNQ, he thinks. Both have yields of 5.6% today.

Suncor will be a survivor of this energy down turn, but only wants to own one oil sands producer. He prefers CNQ. Suncor has benefited from their refinery assets, but that value uplift is pretty much played out.

Suncor vs. Pembina Investor sentiment for oil is very weak, but Suncor is among the better performers in the last decade because their Oil Sands assets have such a long life that they don't have to keep investing money each year to maintain that production. Ultimately, Canada needs to see takeaway capacity to improve. He owns Pembina which is not as directly effected by the oil price. Suncor is an oil play; Pembina is an income play. Either one is fine.

Issue for the oil industry is that they have to continue to explore, pay their large dividends, and decarbonize themselves. Great company. Bigger issue is how they become less carbon intensive. If they don't, they'll be starved for capital. Suncor's making an effort in these areas. You can hold it for the dividend. He owns CNQ instead.