Barclays on Canadian Oil & Gas: E&P (Mid-Cap): Income and Growth: The Best of Both Worlds
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Price: $4.81 -0.21%
Rating Summary:
9 Buy, 5 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
9 Buy, 5 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays on Canadian Oil & Gas: E&P (Mid-Cap): Income and growth: the best of both worlds
Barclays analyst, Grant Hofer, said, "Initiating coverage on 13 exploration and production (E&P) companies with a Positive stance - a sector offering compelling resource exposure with strong dividend yields: We believe the Canadian dividend-paying intermediate space is well positioned, with low-risk growth and attractive dividend yields (average 5.7%). The companies have dominant positions in major resource plays and the capital to develop them, supporting average production growth of 11% in 2012/13. Dividends are also well supported, and expected to remain stable through 2013. We believe this combination should support above-average returns (and lower risk) within the broad energy complex."
"Going-concern valuation that reflects ability to develop resource plays: We are introducing a proprietary valuation methodology based on a going-concern net asset value (NAV) approach. Specifically, we blow-down existing production/reserves, while funding each resource play with a specific development schedule and assumptions (both operational and economic, based on our play-specific analysis). The model works within the confines of available cash flow, assuming that each company continues to pay a dividend at a targeted payout level."
"Total return outlook of 18.0%, including 5.7% dividend yield: We believe that the sector offers attractive risk-adjusted returns today, particularly in the context of low interest rates and anticipated cash flow growth. With a stable dividend outlook, investors are rewarded to hold the stocks while maintaining exposure to most of Western Canada's major resource plays. Our top picks include Baytex, Crescent Point, and PetroBakken. We also rate two stocks as Underweight: Enerplus and NAL."
Stocks that trade on U.S. exchange include: Baytex Energy Corp. (NYSE: BTE)(Overweight, PT $62), Enerplus Corporation (NYSE: ERF) (Underweight, PT $27), Pengrowth Energy Corp. (NYSE: PGH) (Equalweight, PT $11), and Penn West Petroleum Ltd. (NYSE: PWE)(Equalweight, PT $20)
Barclays analyst, Grant Hofer, said, "Initiating coverage on 13 exploration and production (E&P) companies with a Positive stance - a sector offering compelling resource exposure with strong dividend yields: We believe the Canadian dividend-paying intermediate space is well positioned, with low-risk growth and attractive dividend yields (average 5.7%). The companies have dominant positions in major resource plays and the capital to develop them, supporting average production growth of 11% in 2012/13. Dividends are also well supported, and expected to remain stable through 2013. We believe this combination should support above-average returns (and lower risk) within the broad energy complex."
"Going-concern valuation that reflects ability to develop resource plays: We are introducing a proprietary valuation methodology based on a going-concern net asset value (NAV) approach. Specifically, we blow-down existing production/reserves, while funding each resource play with a specific development schedule and assumptions (both operational and economic, based on our play-specific analysis). The model works within the confines of available cash flow, assuming that each company continues to pay a dividend at a targeted payout level."
"Total return outlook of 18.0%, including 5.7% dividend yield: We believe that the sector offers attractive risk-adjusted returns today, particularly in the context of low interest rates and anticipated cash flow growth. With a stable dividend outlook, investors are rewarded to hold the stocks while maintaining exposure to most of Western Canada's major resource plays. Our top picks include Baytex, Crescent Point, and PetroBakken. We also rate two stocks as Underweight: Enerplus and NAL."
Stocks that trade on U.S. exchange include: Baytex Energy Corp. (NYSE: BTE)(Overweight, PT $62), Enerplus Corporation (NYSE: ERF) (Underweight, PT $27), Pengrowth Energy Corp. (NYSE: PGH) (Equalweight, PT $11), and Penn West Petroleum Ltd. (NYSE: PWE)(Equalweight, PT $20)
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