Canadian Energy Stocks Sweep Weiss Buy List
Almost six months ago, we analyzed the energy sector and found some very disappointing results. At the time (May 9, 2016), we rated 997 stocks and only five of them were BUY rated, 111 were a HOLD, and the majority, 881, were a SELL. The sector was struggling, companies were failing, and the ratings were poor.
Now, six months later, we decided to look again to see what is going in the sector and to identify some BUY companies that could be a good investment option.
The SELL rated companies still dominate the sector (79.4 percent), but the overall ratings have improved. Currently, there are 10 BUY rated energy stocks, up from 5 since the prior review, 180 HOLD, up from 111, and 732 SELL, down from 881.
Using our Stocks Screener, we started with the 10 BUY rated energy stocks. From there we only wanted to see to ones with at least an average one-, three-, and five-year performance. Once we entered that criteria, the list was cut down to four companies. All of them Canadian.
High Arctic Energy Services Inc (HWO.TO) is a B- rated oilfield services company with operations in Canada and Papua New Guinea. The company provides offshore and onshore drilling services, including personnel, equipment and support services. It pays a 4.44 percent dividend and can offer a 315.8 percent five-year return. The company’s stock became a BUY in mid-June, 2016, after an upgrade to B- from C+.
ZCL Composites Inc. (ZCL.TO) designs, manufactures, and supplies fiberglass reinforced plastic underground storage tanks in Canada, the U.S., and internationally. The company currently holds a B- investment rating, pays a 2.6 percent dividend, and reached a 52-week high of $11.95 less than two weeks ago.
Parkland Fuel Corporation (PKI.TO) is an independent marketer and distributor of fuels and lubricants in Canada and the United States. It supplies and supports gas stations under Fas Gas Plus, Race Trac, Pioneer, Esso, and Chevron brand names. The company was upgraded to B- from C+ in September, 2016. It has a 236.1 percent five-year return and pays a 3.8 percent dividend.
Enbridge Income Fund Holdings Inc. (ENF.TO) currently holds a B- rating from Weiss. Through its investments in Enbridge Income Fund, the company holds energy infrastructure assets and owns crude oil gathering pipelines and storage facilities in Canada. It pays a 5.58 percent dividend and has a 121.6 percent five-year return.
Although the entire energy sector is not in the best shape, these Canadian companies show there are some great options for you to consider if you’re looking to add energy investments to your portfolio.