-
Suncor Energy Inc. (SU)
-
Canadian Natural Resources Limited (CNQ)
-
Cenovus Energy Inc. (CVE)
-
MEG Energy Corp. (MEG)
Q: Dear Peter et al:
A "Drill down" from the top type of a question!
In Energy sector, these three things seem to be important.
a. Pay down debt.
b. Keep paying healthy dividend or even increase it.
c. Buy back shares.
Recently Cole Smead came on a podcast and clearly laid out his case for his preference to invest in companies that buy back shares. (In the Money by Amber Kanwar, erstwhile BNN Bloomberg Marketcall host).
What is your take on this? What are the 3 companies in the Energy sector that you like using Share buy backs as the metric?
Thanks in advacnce.
P.S. Hope we see you Peter on Amber Kanwar's In the Money podcast. It seems to be getting some traction now.
A "Drill down" from the top type of a question!
In Energy sector, these three things seem to be important.
a. Pay down debt.
b. Keep paying healthy dividend or even increase it.
c. Buy back shares.
Recently Cole Smead came on a podcast and clearly laid out his case for his preference to invest in companies that buy back shares. (In the Money by Amber Kanwar, erstwhile BNN Bloomberg Marketcall host).
What is your take on this? What are the 3 companies in the Energy sector that you like using Share buy backs as the metric?
Thanks in advacnce.
P.S. Hope we see you Peter on Amber Kanwar's In the Money podcast. It seems to be getting some traction now.
5i Research Answer:
There has been a decades long debate on whether buy backs are better than dividends. Of course, dividends are paid with after-tax earnings, but some investors like getting 'their' profit. But certainly at current valuations we think it makes sense for companies to buy back their own shares. Many could retire ALL of their shares in four or five years, based on current cash flow and valuations. We would look at CVE, SU, CNQ and MEG as companies to consider under this theme.