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Catch Up on these Best 9 Canadian and 9 USA Natural Gas Stocks

Melisa R. H. Posted On February 28, 2019
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Energy has taken a hit recently, but the outlook is looking better in the coming years. There are positive signals that are improving the future of the oil and gas sector, and the energy sector has made gains recently, rising 0.6%. Furthermore, oil prices are climbing once again, and the differential between Canadian and international oil prices are falling. If you can stomach some volatility, this could be a good position to hold longer term to get a healthy return.

⚡ Energy: Oil and Natural Gas

Canadian

TransCanada Corp (TRP-T)
A major energy company out of Calgary that operates infrastructure in North America.They’ve increased dividends recently. It carries lower risk as a business since 95% of their revenues are regulated or from long-term contracts. The stock could go up greatly with the approval of the Keystone project, if it were to happen.

TC Energy (TRP-T) — Stockchase
TC Energy (TRP-T) — Stockchase

(A Top Pick Feb 02/21, Up 21.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with TRP has triggered its stop at $67. To remain disciplined, we recommend covering the position at this time.

stockchase.com stockchase.com

Husky Energy (HSE-T)
One of Canada’s largest integrated energy companies. It moves with oil prices. The stock has been experiencing higher highs and lows. Recently they stepped away from taking over MEG-T which surprised many investors. They have beat their earnings, and have an excellent balance sheet. For an energy stock, this is very defensive.

Husky Energy (HSE-T) — Stockchase
Husky Energy (HSE-T) — Stockchase

HSE-T + CVE-T: Stay after the merger? He does not own either one. He understands the merger makes sense. There are a lot of cost savings that can be found. He prefers CNQ-T, PXT-T and one of his Top Picks today. He prefers these to HSE-T. If the sector bounces back you could get an…

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Imperial Oil (IMO-T)
Canada’s second-biggest integrated oil company. They are financially strong, and it could be a good time to get in, as their valuation has been reaching historic lows. Fundamentally, the company is very good, but concerns over the sector have beaten it down, making for an attractive buying opportunity.

Imperial Oil (IMO-T) — Stockchase
Imperial Oil (IMO-T) — Stockchase

Company trading at slight premium to Suncor. Low risk name trading at 15x cash flow. Expecting a ~$90 share price. Not enough return for risk in energy sector.

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Suncor Energy Inc (SU-T)
A company that specializes in production of synthetic crude from oil sands. They have a lot of growth potentially and are a low cost operator. They’ve been generating a lot of free cash flow. A premiere holding in Canadian energy.

Suncor Energy Inc (SU-T) — Stockchase
Suncor Energy Inc (SU-T) — Stockchase

John: Shareholder activism has come to SU, and this should help the valuation. Likes oil more than nat gas, as oil is in a structural shortage. Oil players are extremely cheap, with 30% cashflow yields, 2x operating cashflow. Perhaps not a hold for the next 5-10 years, but a good rental.

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Cenovus Energy (CVE-T)
An integrated oil company. They’re moving more oil by rail and the price is good. They have good exposure to WCS differentials, and the new CEO is repositioning the company. A good choice for those looking to get exposure in a large cap Canadian stock.

Cenovus Energy (CVE-T) — Stockchase
Cenovus Energy (CVE-T) — Stockchase

If you believe the oil price will hold, then CVE should do well. She owns no oil stocks. Oil prices are flattening, because of fears of a recession eroding oil demand. A caveat.

stockchase.com stockchase.com

Gibson Energy (GEI-T)
A supplier to the oil and gas industry. They are more of a pipeline company, with a refocusing on infrastructure. If oil continues to rise, this company will go up with it.

Gibson Energy (GEI-T) — Stockchase
Gibson Energy (GEI-T) — Stockchase

Prefers Canadian mid-streams, like PPL or GEI, both of which are focused on cashflow. Both are approaching fair value, but are good candidates if your quest is a good dividend and dividend growth.

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Encana Corp (ECA-T)
A producer, transporter and marketer for natural gas, oil and natural gas liquids. They represent the entire Canadian energy patch. They bought a U.S. company last year and a combination of successfully integrating this company, and a rise in oil prices will push this stock up. They are experiencing strong volume now.

Encana Corp (ECA-T) — Stockchase
Encana Corp (ECA-T) — Stockchase

Just beat earnings and have increased production. Cheap valuation compared to peers. But it's getting more expensive heading into 2021. There's no growth here, but that goes with the entire oil patch. The real issue is will they survive. Their balance sheet is getting better, but still high for a blue-chip name. You'll be saved…

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Tourmaline Oil Corp (TOU-T)
An independent natural gas producer. They are considering adding to their dividends or to buy back stocks, as they look forward to having more cash flow. Their balance sheet is good, and they have good managers. They are moving more liquid natural gas and building facilities.

Tourmaline Oil Corp (TOU-T) — Stockchase
Tourmaline Oil Corp (TOU-T) — Stockchase

(A Top Pick Mar 15/22, Up 42.6%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with TOU triggered its stop at $69.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 58%, when combined with previous buy recommendations.

stockchase.com stockchase.com

Canadian Natural Rsrcs (CNQ-T)
An oil and gas exploration, development and production company. They have great cash flow and they are expected to increase dividends next week. They are a flexible company that is well managed. They’v been focusing their operations on upgrading and refining oil in the last few years.

Canadian Natural Rsrcs (CNQ-T) — Stockchase
Canadian Natural Rsrcs (CNQ-T) — Stockchase

The energy sector has come off in the past month but could stay fairly strong depending on the slow down in the economy. Trading is based on commodity prices. Wait for a pull back. Central banks in Asia are actually starting to cut rates to stimulate the economies.

stockchase.com stockchase.com

USA

Chesapeake Energy Corp. (CHK-N)
An American petroleum and natural gas exploration and production company. They’re shares rose by 10% yesterday as the company beat profits as they move towards oil and away from gas. They recently acquired another company and are expected to produce more crude oil in 2019.

Chesapeake Energy Corp. (CHK-N) — Stockchase
Chesapeake Energy Corp. (CHK-N) — Stockchase

Probably a name he would hold or avoid, simply because it is so highly levered. A good company. It has some good assets. If you see a sustained bull market in energy, this could be fairly attractive. However he doesn’t think we are going to have a bull market in energy right now, so this…

stockchase.com stockchase.com

Continental Resources (CLR-N)
A U.S. shale producer. They expect oilfield service costs to remain low due to weaker oil prices, but if you are bull-is on oil, this could be a good contrarian play. Their shale field output hit a record during third quarter 2018, and are expected to continue rise as they complete more wells.

Continental Resources (CLR-N) — Stockchase
Continental Resources (CLR-N) — Stockchase

This was the poster child for the US growth machine. But now they are in one of the worst places. Cut cap X program and will likely have to cut it again. Prefers Canadian oil stocks. Thinks there will still be revisions to CLR-N’s cash flow.

stockchase.com stockchase.com

Cabot Oil & Gas (COG-N)
An independent oil and gas company engaged in development, exploitation and exploration. Their natural gas pipeline in the states has been given another chance with approval from the courts. They’ announced a quarterly profit helped by natural gas prices and increased production.

Cabot Oil & Gas (COG-N) — Stockchase
Cabot Oil & Gas (COG-N) — Stockchase

(Top Pick March 10/14, Down 14.12%) They are a lower cost operator. He sold this a couple of months after recommending it. Their challenge has been that their industry has been wildly successful in getting production growth and now there is a severe shortage of pipelines in the region so the price they sell for…

stockchase.com stockchase.com

Chevron Texaco (CVX-N)
They manage subsidiaries that engage in integrated energy and chemicals operations. They’ve been matching estimates in the recent quarters and are in the middle of receiving bids for assets in the British North Sea.

Chevron Texaco (CVX-N) — Stockchase
Chevron Texaco (CVX-N) — Stockchase

(A Top Pick Dec 21/21, Up 34.2%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with CVX triggered its stop at $155. To remain disciplined, we recommend covering the position at this time. This will result in a net investment gain of 42%, when combined with previous buy recommendations.

stockchase.com stockchase.com

EOG Resources Inc (EOG-N)
A petroleum and natural gas exploration company. They are expecting to see a fourth quarter profit boost from oil and gas hedging. They are a shale oil producer that has weathered well the oil price drop. They topped profit estimates last year.

EOG Resources Inc (EOG-N) — Stockchase
EOG Resources Inc (EOG-N) — Stockchase

(A Top Pick May 17/22, Down 10.1%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with EOG has triggered its stop at $115. To remain disciplined, we recommend covering the position at this time.

stockchase.com stockchase.com

Kinder Morgan Inc. (KMI-N)
The largest energy infrastructure company in North America. Strong performance in its pipeline and terminal business helped their profits surge last quarter. They’re also working on building ports in Texas, as US oil export booms.

Kinder Morgan Inc. (KMI-N) — Stockchase
Kinder Morgan Inc. (KMI-N) — Stockchase

An inflation-protection trade: Energy is the obvious play. Kinder Morgan is a laggard in energy, though not directly tied to oil prices, but will benefit during this rally. Also likes Cleveland-Cliffs which reports tomorrow. Down from highs, but still very high and lifted by high steel prices. Upside here as the economy expands. Alaska Air.…

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Noble Energy Inc. (NBL-N)
An independent energy company in crude oil, natural gas and NGLs. They’ve lowered their capital expense in response to a drop in crude oil prices and are aiming to return over $500 million to shareholders by 2020.

Noble Energy Inc. (NBL-N) — Stockchase
Noble Energy Inc. (NBL-N) — Stockchase

This all depends on what oil prices are going to do. $50 oil kind of keeps them going, but the costs are much higher than they are getting at the end of the day.

stockchase.com stockchase.com

Southwestern Energy (SWN-N)
An energy company in natural gas and oil exploration, development and production. They sold their Fayetteville shale asset last year in a deal valued at about $1.87B.

Southwestern Energy (SWN-N) — Stockchase
Southwestern Energy (SWN-N) — Stockchase

options Energy continues to see action. This is trading at $8, buying 20,000 of the May 7 calls in order to get more leverage. They will move as the stock moves up. He remains very overweight energy.

stockchase.com stockchase.com

Exxon Mobil (XOM-N)
An American multinational oil and gas corporation. They recently found another giant gas reservoir in Cyprus. Their reserves are up 23% from US shale. They’vealso outperformed estimates for Q4.

Exxon Mobil (XOM-N) — Stockchase
Exxon Mobil (XOM-N) — Stockchase

Big cap oil is reconsidering how they deploy capital. They're working on returning capital to shareholders, paying down debt, buying back shares rather than building new projects. That's why you have this tight issue in the oil market. Companies are not expanding production. It will continue to do well as a cashflow machine.

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