Published Wed, 13 Feb 2013 19:30 CET by TopYields.nl
With the US Energy Information Administration predicting a long-term uptrend for oil prices over the next few decades in its Annual Energy Outlook 2013, investors around the world have started looking closely at stocks of companies in the energy sector. As per AEO 2013 released recently, in 2040, Brent Crude is likely to hover around $163 per barrel which is equivalent to $269 per barrel in nominal terms. For AEO2013, the oil price is represented by spot prices for light, sweet Intercontinental Exchange Brent crude oil instead of WTI crude oil traded on NYMEX. This change was made to better reflect the price refineries pay for imported light, sweet crude oil and takes into account the divergence of WTI prices from those of globally traded benchmark crudes such as Brent. WTI prices have diverged from other benchmark crude prices because of insufficient pipeline capacity to move crude oil to and from Cushing, Oklahoma (the location at which WTI prices are quoted), and the growth of midcontinent and Canadian oil production that has overwhelmed the transportation infrastructure needed to move crude from Cushing to the U.S. Gulf of Mexico.
Whether it is the upstream explorers, the downstream refiners or the oil infrastructure companies, all are likely to benefit from this firm price trend.
Consequently, several oil companies are looking attractive from the point of valuations. In addition to the possible capital appreciation over the next few years, if one can get hold of a steady stream of dividend income, it will an excellent icing on the cake. Regular dividends reduce the cost of acquisition of the share and also limit the downside risk based on the theoretical pricing models. Here, one can think of some Canadian oil companies which have an excellent track record of paying dividends. Two of them are discussed below.
Stock symbol(s): COS.TO,COSWF,CPG.TO,CSCTF
|Stock name||ISIN||Last trade||P/E||EPS||Div PS||Ex Div Date||Payout Ratio||Div Yield|
|CRESCENT POINT ENERGY||CA22576C1014||44.56||118.9||0.4||2.76||Mar 27 2014||738||6.19|
|CANADIAN OIL SANDS||CA13642L1004||24.13||14.1||1.7||1.40||Feb 19 2014||81||5.80|