Tourmaline Oil Corp (TOU.TO)

Oil is the safest of all the resource categories. Here are 2 names that will let you sleep at night.

Big fan of CNQ: best in class in execution, quality assets, aristocrat in dividend growth. 

TOU doesn't give the upfront, regular dividend, but has been generous with special dividends. Capable of delivering in high single-digit range in terms of total yield.

Sentiment toward security of fuel has changed, brought on by the Russian invasion of Ukraine. His estimates show that Canadian nat gas production will have to increase 30-50% by 2030 to satisfy LNG demand.

Unique, as they have access to the Gulf Coast, good egress in California. His favourite stock, but still frustrating. A staple in the energy space.

The caller asked about his preference between Tourmaline and CNQ. Both are the highest quality oil and gas companies in Canada. Tourmaline is superbly run but is natural gas weighted and moves around a lot along with the price of natural gas. CNQ is more diversified and therefore its stock price is steadier.

Best in terms of management, balance sheet, and returning capital to shareholders. Management is best in class. Recently increased dividend, plus special dividends. Low-cost provider gives them the best balance sheet, profits are fantastic. He's positive on oil and gas. Bonavista acquisition will do great things for the company. Will increase production by further acquisitions at fair prices. Yield is 1.43%.

A dominant nat gas company that's well-run. They move gas from Canada to California. Because there are no processing plants for LNG in Canada right now, TOU has been sending their gas to the US to refine then ship to Asia, but receive a much better price. Volumes aren't large yet, but Asian demand is strong.

His favourite is natural gas. Solar is at the mercy of the sun, and suffers on cloudy days. Nat gas you can turn on and off at will. The more solar and wind power, there will be more nat gas demand with nat gas as a back-up. He read a book that says that modern civilization depends on 4 cornerstones which all rely on fossil fuels: fertilizer-driven agriculture, cement, steel and plastics. Even if every car was an EV, we'd still need fossil fuels. TOU has tremendous reserves and pays a good yield.

NA gas is trading sideways, and will probably stay that way for a while. A cold winter could easily cause gas price to spike. Low-cost gas producer. Trades at 6x price to cashflow, one of the best-run oil/gas companies in the world.

Energy prices should remain firm. Oil usage at all-time high, have to build US reserves again. In the sector, he prefers CNQ and TOU for growth, though dividends are not as high as some other companies.

Canada's top natural gas producer. Nat gas price was temporarily depressed, so this presents an opportunity. Hitting its 50-day MA, so technically not a bad entry point. Value score is 10/10, fundamental 9/10. Street consensus is Outperform. In a position to improve financial resilience and boost shareholder returns. Yield is 1.54%.

One of the best management teams, massive insider ownership. 75-year-deep, diversified inventory. But it's still 77% natural gas, and he's bullish on oil. For next year, he sees a 7.6% yield by including special dividends. Solid name.

In oil, buy at home, but Canadians, because they're much cheaper and are more likely to hike dividends like CNQ, Suncor or TOU-T. Great cash flows and buying back shares. Even if oil is above $70, these stocks remain cheap.

Best in class for management, assets, and balance sheet. Recently increased dividend, often declares special dividend. Very little debt. Opportunities in LNG. Wildfires have hampered a bit, but not substantially. He's holding, and would add on weakness. Yield is 1.47%.

Best of the natural gas stocks in Canada. Nat gas pipelines are full with lots being found. Need to wait for pipelines to get built. Low-cost producer, great land, well managed. Hold for now, perhaps buy if nat gas moves up to $1.50 or so.

He's bullish natural gas in western Canada. LNG Canada is coming online in 2025, a game changer for nat gas demand in Canada. Also, there have been two recent FIDs (final investment decisions) in the US, where LNG production is set to increase. All this means, more nat gas production and higher, more stable pricing. Likes TOU a lot, but owns the similar Arc Resources.