Q: I currently own both the above and both are winners for me at this point. The PE's are
about the same but CNQ dividend is higher and is a much bigger company. What do you think about selling TVE and buying more CNQ? Is the % growth potential of TVE greater than that of CNQ? thanks and happy new year to you and the whole 5i crew. I have done quite well by reading all your answers every morning, Much appreciated.
about the same but CNQ dividend is higher and is a much bigger company. What do you think about selling TVE and buying more CNQ? Is the % growth potential of TVE greater than that of CNQ? thanks and happy new year to you and the whole 5i crew. I have done quite well by reading all your answers every morning, Much appreciated.
5i Research Answer:
Despite both being classified as energy exposure. TVE is more of an oil name, while CNQ is more of a gas producer. In addition, TVE is way cheaper relative to CNQ in terms of valuation multiples due to CNQ’s size and popularity. TVE is trading at 3.3x Forward EV/EBITDA, while CNQ is trading at 6.1x. The two businesses are cyclical and are expected to grow around 3% over time. We are comfortable holding both, given their different exposure to the energy market. That being said, if investors HAVE TO choose only one, we feel CNQ is best for investors that are seeking cash flow and dividends, while TVE would better suit investors that are seeking some growth.