5 TSX oil and gas stocks to explore this quarter

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 5 TSX oil and gas stocks to explore this quarter
Image source: © Pryc1969 | Megapixl.com

Highlights

  • In Q3 2022, Cenovus Energy’s net earnings were C$ 1,609 million.
  • Imperial Oil’s dividend in Q3 2022 soared to C$ 227 million.
  • In Q2 2022, TC Energy’s net income was C$ 889 million.

There are several changes the government implemented in the oil and gas sector. Regardless of the changes, the sector still forms a crucial part of the market. 

Meanwhile, the S&P/TSX Capped Energy Index witnessed a YTD (year-to-date) rise of 64.155 per cent. As the world has restored normalcy after the pandemic, there is an increase in demand for oil at a global level.

To make effective use of the stocks in your portfolio, you can operate with a long-term investment strategy. This way, it can be easy to spread your risk and make the most out of the gains. Choose your stocks with the right technique and by considering all the prevailing macroeconomic factors.

Let us explore five oil and gas stocks along with their present financial situation:

  1. Cenovus Energy Inc. (TSX: CVE)

Cenovus Energy Inc. operates as an oil company and is engaged in developing oil sands assets. The company is involved in the production of natural gas and liquids and crude oil. The refining operations of the company are in the US and the production operations are in Canada.

In Q3 2022, Cenovus Energy’s net earnings were reported at C$ 1,609 million versus C$ 551 in Q3 2021. The free funds flow also grew to C$ 2,085 million from C$ 1,695 million for the same comparative period.

The cash from operating activities in Q3 2022 rose to C$ 4,089 million from C$ 2,979 million in Q2 2022. The net debt declined to C$ 5,280 million from C$ 7,535 for the same period. Cenovus Energy distributes a quarterly dividend of C$ 0.105 per share. It has a dividend yield of 1.467 per cent and the EPS (earnings per share) were C$ 2.66.

  1. Imperial Oil Limited (TSX: IMO)

Imperial Oil Limited operates in the oil and gas sector and is engaged in the marketing and refining of petroleum products.

In Q3 2022, the net income of Imperial Oil rose to C$ 2,031 million from C$ 908 million in Q3 2021. The cash flow from operating activities increased to C$ 3,089 million from C$ 1,947 million in the same period. The cash and cash equivalents witnessed an increase too and were reported at C$ 3,576 million versus C$ 1,875 million.

The dividend paid to the shareholders soared to C$ 227 million from C$ 195 million in the year-ago quarter. Imperial Oil’s total revenue grew to C$ 15,224 million from C$ 10,233 million. The EPS of the company is at C$ 9.79, while its quarterly dividend is C$ 0.44 per share.

  1. TC Energy Corporation (TSX: TRP)

TC Energy Corporation is an energy infrastructure company that consists of pipeline and power generation assets with a network of approximately 92,600 kilometers of natural gas pipeline, along with 4,900 kilometers from the Keystone Pipeline system. The company has its presence in Mexico, Canada, and the US.

In Q2 2022, TC Energy’s net income declined to C$ 889 million from C$ 975 million in the year-ago quarter. The comparable EBITDA C$ 2,369 million from C$ 2,246 million. The company declared a quarterly dividend of C$ 0.90 per share with an EPS of C$ 3.21. The five-year dividend growth of TC Energy was reported at 8.21 per cent with a dividend yield of 5.984 per cent.

  1. Tucows Inc. (TSX: TC)

Tucows Inc. is a high-speed internet provider along with mobile phone services and caters to consumers and businesses at a global level. The clientele of the company includes retail mobile providers and offers Mobile Service Enabler (MSE) solutions to them. Within the internet services, the company distributes digital certificates, email, and domain name registration.

In Q3 2022, Tucows’ net revenue rose to US$ 78.05 million from US$ 75.89 million in Q3 2021. The adjusted EBITDA declined to US$ 7.87 million from US$ 12.2 million for the same period. The net loss fell to US$ eight million from US$ 1.4 million in the same comparative period.

The P/E (price-to-earnings) ratio of CVE, IMO, TRP, TC and PPL:

  1. Pembina Pipeline Corporation (TSX: PPL)

Pembina Pipeline Corporation has an integrated product portfolio and operates as a midstream company in North America and Canada markets. The assets of the company consist of pipelines and gas gathering as well as storage assets, fractionation assets and the assets across propane exports.

In Q3 2022, Pembina’s revenue grew to C$ 2,779 million from C$ 2,149 million in Q3 2021. The net revenue also grew to C$ 1,030 million from C$ 961 million for the same period. The gross profit soared to C$ 874 million from C$ 682 million.

The adjusted EBITDA witnessed an increase and was reported at C$ 967 million versus C$ 850 million. Pembina pays a dividend of C$ 0.217 per share every month and has a dividend yield of 5.696 per cent. The five-year dividend growth of the company was posted at 5.53 per cent. The earnings per share of the company is C$ 4.83.

On November 8, 2022, the stock price of Pembina Pipeline was at C$ 45.82 and saw an increase of 6.93 per cent within 12 months.

Bottom Line

Fluctuations in energy demand may lead to an impact on the performance of the stocks operating in the sector. Hence, while building your portfolio, consider the risk factors that may alter your stock selection. Most investors look at their stocks from the returns point of view. Include the risk factor too and safeguard it with the element of diversification. This will mitigate the risk and pave the way for a stable portfolio.

Along with this, repositioning is crucial from time to time as it keeps you updated with the changing trends and factors.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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