Vermilion Energy Inc (VET.TO)

Would prefer TOU over VET. The challenge is the stressed balance sheet for these energy providers. VET has some of the worst price momentum, value, volatility and earnings profile in terms of current return on equity. They can move quickly if they look like they will survive. If you are looking for a huge amount of leverage and upside for a recovery, you could own VET but TOU is the more stable choice.

A good operator with fine internationally diversification. They cut their high dividend, but had to and won't return to that level. We live in a different world with lower oil prices and demand. VET's balance sheet is okay and this will survive. That said, he prefers Tourmaline Oil which has more cash.

Look like value, going to be volatile. If oil spikes, you can make a quick buck. Very good company, but in a tough industry. If he were to own energy, he'd look at the bigger players like SU or CNQ. This would be a gamble. Better places for your money than in energy.

VET vs OVV? They are both stocks he would not own. OVV participated well on expected index buying in the US, but they are no longer able to attract US investors based on their share price. It is a non-starter for sure. VET cut the dividend and they changed management, but it will be a long road. They can't sell assets to help reduce debt and they can't raise the dividend. They are in far too many geographical areas and he thinks they have lost focus.

The only change you will see from the company is less dividends with debt pay down being the focus. Everything else is really the commodity price. Energy is generally out of favour. It has typically been a good quality dividend payer. He got out before the major downdraft. They will focus on paying down debt before re-instating the dividend. If you are looking for an energy stock, then why not get one paying a dividend like CNQ-T.