The Canadian energy services stocks we’ve dug up have the strongest cash flows based on a Discounted Cash Flow valuation
SmallCapPower | July 6, 2020: Energy services stocks experienced a severe selloff following the COVID-19 lockdown back in March, as crude oil prices plunged. For deep value investors, however, this could represent a promising opportunity for those with a longer-term time horizon. Today we have drilled down and discovered two Canadian energy services stocks with the strongest cash flows based on a Discounted Cash Flow (DCF) valuation.
*Returns are based on closing stock prices as of July 3, 2020
Enerflex Ltd. (TSX:EFX) – $5.60
Enerflex manufactures and services equipment, systems and turnkey facilities used to process and move natural gas from the wellhead to the pipeline. The Company supplies natural gas compression, oil and gas processing, refrigeration systems, and electric power generation equipment, as well as related engineering and mechanical service expertise. In March 2020, Enerflex slashed its quarterly dividend by 83% to $0.02 per share. EFX stock has a current dividend yield of 1.5%.
One-Year Return: – 64%
North American Construction Group Ltd. (TSX:NOA) – $8.43
North American Construction is one of Canada’s largest providers of heavy civil construction and mining contractors, providing services to large oil, natural gas and resource companies. During Q1 2020, North American Construction Group reported better-than-expected revenue that rose 7% to $198.8 million along with a 37% increase in Adjusted EPS to $0.70, which also surpassed analyst expectations. NOA stock has a current dividend yield of 1.9%.
One-Year Return: – 35%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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Enerflex Ltd. (TSX:EFX) – $5.60
North American Construction Group Ltd. (TSX:NOA) – $8.43
