Vermilion Energy Inc (VET.TO)

(Past Top Pick Sept. 13, 2017, Down 8%) They recently bought Spartan Energy, so how will they integrate it? Their margins have been squeezed. Their plans to expand German assets has been delayed a bit. The share price has fall to the point where they pay a 7.3% dividend which is safe. He still believes highly in Vermillion.

It is an international company with assets all over the world essentially. Likes the Management team. Decent dividend yield higher than 7%.

He bought this in 2016. A well diversified company and very well run. He thinks Brent pricing is going to go higher and Vermilion will benefit from that. A lot of upside to this company. Yield = 7.22% (Analysts’ price target is $55.75)

Energy is a big long-term cyclical. He is not bullish on energy long-term with a lot of new potential supply. One of the better companies and it is fine to hold. One of the most secure holdings in the sector with a good track record.

The trailing PE is 68 times. Earnings are forecast to grow by 50% next year. It has a reasonable yield. 50% payout. If the price of oil stays up it should do okay but there is great debate.

They did not cut the dividend when the stock bottomed in 2016. When this stock trades at a 4% dividend yield, that is the high end of its range. When it trades at 7% yield, that’s the low end of its range. He sees a $40 price as low compared to his $50 1-year target. He has a $70 5-year target. He thinks it might drop below $40 in tax-loss season. Yield 6.5%

Different from typical TSX-listed stock, as many assets are in Europe so the risk element is significantly less. If you own it, hold on to it. Not a bad buy on a dip, in the under $40 range. A target of $50 is a possibility. (Analysts’ price target is $55.82.)

If you want to play Canadian oil short-term, look at a company with Brent oil exposure, not Canadian where companies suffer oil discounts on the market. That said, look at Vermillion or Royal Dutch Shell.

Geographically diversified. They are getting better prices. At the top of her list for Canadian names. The Management team is very clever. One of her favorite names in the oil patch. 6.5% dividend yield. She wouldn’t expect them to be cutting the dividend.

He owns it. It pays a dividend that is higher than most other energy companies. In general, oil and gas prices in Canada are depressed by the lack of takeaway capacity. Vermillion benefits from the worldwide rise in oil prices because the majority of its assets are outside of Canada. For an investor who is looking for a Canadian energy stock, he recommends Vermillion.

Safe 6.6% yield. They have lots of free cash flow. They'll likely raise that dividend. The company is doing great. Their European operations are doing very well and, because they're in Europe, are avoiding the differentials that Canadian energy companies suffer. Europe accounts for a big portion of their revenues. Merill-Lynch just upgraded VET.

LIkes it. They did a purchase in Canada, though it traditionally has diversified outside Canada. But they found it hard to buy good properties in Europe where offshore gas operations are declining. Instead, they bought some cheap assets in Canada. Debt has put pressure on the stock. Pays a safe dividend. He'll hold onto it.

It has held at very good levels due to its international diversification. He likes the Spartan acquisition and thinks it was done at a very good valuation. This stick offers a lower beta and good dividend – a good stock to hold, but not the torque he is looking for.

People are questioning whether they can sustain the dividend. He thinks the cash flow stream is strong enough to sustain the dividend. This is not a cheap stock relative to the group but it has that solid yield.

He likes this company and began coverage in August. It has a book value of $17.39 per share. Debt is $1.6 billion versus equity of $2.7 billion of debt. He has cash flow of $5.58 per share. The dividend is paid monthly and has been raised. When the yield gets to 7% it becomes a “table pounding” buy. Yield 6%. (Analysts’ price target is $57)