Stock price when the opinion was issued
Cold winter weather has been good for nat gas prices. Wild card is AI demand -- what's the sustainable fuel that can keep data centres running 24/7? It's natural gas. Over the next few years, a fortune will be spent building data centres. Hopefully, with new administration in Canada, this name can benefit from the added infrastructure.
Earnings this week, he expects big increase to special dividend. Nice place to collect a growing income stream.
He's a long-term natural gas bull; it's the fuel of the future, and LNG Canada is about to start. TOU has a good CEO and good inventory and pays a high dividend. That said, TOU is not his favourite nat gas stock though holds a lot of shares. TOU is more about dividends. TOU buys a lot of companies which creates an overhang and doesn't allow the share price to perform as well, so it lags its nat gas peers.
Nice recent production and FCF beats. High-quality company. Diversified marketing portfolio. Are we in the sweet spot for natural gas as TMX starts to come online and Canada starts to export LNG? He thinks the answer is yes. Trading in line with peers, nice production and FCF growth. Balance sheet's in good shape. Nice dividend. Payout ratio is 90%, pretty safe.
Buy when down. Safe to put some $$ in right now.
Harks back to his view that total return is important. Natural gas is up ~50% from a year ago. With LNG Canada coming on, anticipates nat gas prices improving materially through the end of the year. Business fundamentals are best in class. CEO has been buying shares. Not a lot of flash, but they know what they're doing and keep growing earnings per share.
Despite the name, Canada's largest natural gas producer at ~13% of the total. Likes its capital discipline and lean operating efficiency. 21% stake in TPZ. Early mover to secure market access to delivery hubs on US and Canadian West Coasts. Consistently able to get higher pricing than peers. Generates lots of cash.
Cargo shipping from LNG Canada (as soon as this weekend) will benefit the whole sector. Kitimat project has potential to meaningfully shift supply/demand balance of Western Canadian nat gas, due to Asian demand. Yield is 3.10%, and there are special dividends too.
Very well loved name and rightly so because they have one of the lowest costs in the sector. Still making money at current prices. However, this stock has always been expensive. If the view is positive on natural gas, then it will probably move up. However, AECO is currently trading at a huge discount compared to NYMEX and so in the upcoming quarter there may be a little bit of risk and disappointment on the cash flow front. Alternatively, Encana (ECA-T) would be an interesting gas play as they are looking at strategic alternatives to turn the company around. Trading roughly at about 4X cash flow and debt is reasonable at about 2X. There is talk about them eliminating their dividend and if that happens, this would be a case of Buy on Weakness.