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Welcome to Episode #333 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
It’s time to look at the energy sector again. With WTI crude falling back to around $70 a barrel, the energy stocks, and their earnings, have fallen too. The explorers and producers are cheap again even while cash flows remain strong.
Screening for Cheap Global Energy Stocks
You can screen by industry on Zacks’ stock screener. In the oil & gas industry, there are 3 categories for the exploration and production companies: United States, International, and Canadian. You will have to run 3 different screens.
Tracey added a P/E under 10 to find cheap stocks and a dividend greater than 1% to get companies that have solid free cash flows.
She didn’t add the Zacks Rank for this screen.
The screen with the United States producers produced 21 companies. The screens with Canadian and International producers each produced 3 companies.
Grant Ridge Resources is a non-operated exploration and production company that invests in a portfolio of production across the Permian and 4 other US basins in partnership with proven operators. It is a small cap company with a market cap of just $937 million.
Shares of Granite Ridge Resources are down 23.5% in 2023. It’s cheap, with a forward P/E of 7.7. Granite Ridge also has a big dividend, currently yielding 6.5%.
However, 1 earnings estimate has been lowered for 2023 in the last 60 days. Granite Ridge Resources is a Zacks Rank #5 (Strong Sell).
Crescent Point Energy is a Canadian producer which explores in Alberta, Saskatchewan, and the Bakken in North Dakota. Headquartered in Calgary, it has a market cap of $3.7 billion.
Shares of Crescent Point Energy are down 9.4% year-to-date. But it is dirt cheap, with a forward P/E of 5.4.
Crescent Point Energy has pledged 50% of discretionary excess cash flow to shareholders. It pays a dividend currently yielding 4.5%.
Crescent Point Energy is a Zacks Rank #3 (Hold).
Should investors look to Canadian producers like Crescent Point Energy in 2023?
Vermillion Energy is an international producer headquartered in Calgary. It drills in North America, Europe, and Australia. In 2022, it saw record free cash flow of $1.1 billion
Shares of Vermillion Energy have fallen 32% year-to-date. It’s also dirt cheap, with a forward P/E of just 3.9. Vermillion Energy returned $100 million to shareholders in 2022. It pays a dividend, currently yielding 2.4%.
Vermillion Energy is a Zacks Rank #3 (Hold).
Should you look globally, like with Vermillion Energy, for your producers?
What Else Should You Know About Global Energy Stocks?
Tune into this week’s podcast to find out.
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5 Cheap Global Energy Stocks Paying Dividends
Welcome to Episode #333 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
It’s time to look at the energy sector again. With WTI crude falling back to around $70 a barrel, the energy stocks, and their earnings, have fallen too. The explorers and producers are cheap again even while cash flows remain strong.
Screening for Cheap Global Energy Stocks
You can screen by industry on Zacks’ stock screener. In the oil & gas industry, there are 3 categories for the exploration and production companies: United States, International, and Canadian. You will have to run 3 different screens.
Tracey added a P/E under 10 to find cheap stocks and a dividend greater than 1% to get companies that have solid free cash flows.
She didn’t add the Zacks Rank for this screen.
The screen with the United States producers produced 21 companies. The screens with Canadian and International producers each produced 3 companies.
Cheap Global Energy Stocks Paying Dividends
1. Cheniere Energy (LNG - Free Report)
Cheniere Energy is an American natural gas producer with a market cap of $36.7 billion.
Shares of Cheniere Energy are down in 2023, but only 0.3%. It is cheap with a forward P/E of 4.8.
Cheniere Energy pays a dividend yielding 1.1%. It is a Zacks Rank #3 (Hold).
Should Cheniere, a natural gas producer, be on your short list?
2. Granite Ridge Resources, Inc. (GRNT - Free Report)
Grant Ridge Resources is a non-operated exploration and production company that invests in a portfolio of production across the Permian and 4 other US basins in partnership with proven operators. It is a small cap company with a market cap of just $937 million.
Shares of Granite Ridge Resources are down 23.5% in 2023. It’s cheap, with a forward P/E of 7.7. Granite Ridge also has a big dividend, currently yielding 6.5%.
However, 1 earnings estimate has been lowered for 2023 in the last 60 days. Granite Ridge Resources is a Zacks Rank #5 (Strong Sell).
Should Granite Ridge be on your short list?
3. Enerplus Corp. (ERF - Free Report)
Enerplus was founded in 1986 and was the first oil and gas royalty trust. Headquartered in Calgary, Canada, it has a market cap of $3.1 billion.
Shares of Enerplus are down 20.2% year-to-date. It’s also cheap with a forward P/E of 7.1.
Enerplus has pledged to return 60% of its full year 2023 free cash flow to shareholders. It pays a dividend yielding 1.5%.
2 earnings estimates have been cut in the last 60 days. Enerplus is a Zacks Rank #5 (Strong Sell.)
Should investors wait for a turn in the Zacks Rank before investing in Enerplus?
4. Crescent Point Energy (CPG - Free Report)
Crescent Point Energy is a Canadian producer which explores in Alberta, Saskatchewan, and the Bakken in North Dakota. Headquartered in Calgary, it has a market cap of $3.7 billion.
Shares of Crescent Point Energy are down 9.4% year-to-date. But it is dirt cheap, with a forward P/E of 5.4.
Crescent Point Energy has pledged 50% of discretionary excess cash flow to shareholders. It pays a dividend currently yielding 4.5%.
Crescent Point Energy is a Zacks Rank #3 (Hold).
Should investors look to Canadian producers like Crescent Point Energy in 2023?
5. Vermillion Energy (VET - Free Report)
Vermillion Energy is an international producer headquartered in Calgary. It drills in North America, Europe, and Australia. In 2022, it saw record free cash flow of $1.1 billion
Shares of Vermillion Energy have fallen 32% year-to-date. It’s also dirt cheap, with a forward P/E of just 3.9. Vermillion Energy returned $100 million to shareholders in 2022. It pays a dividend, currently yielding 2.4%.
Vermillion Energy is a Zacks Rank #3 (Hold).
Should you look globally, like with Vermillion Energy, for your producers?
What Else Should You Know About Global Energy Stocks?
Tune into this week’s podcast to find out.