The Canadian energy stocks we’ve discovered could be next to reduce or eliminate their dividend payout
SmallCapPower | April 23, 2020: COVID-19 plus a production feud involving Russia and Saudi Arabia has been devastating to the oil price. Many Canadian oil and gas companies have either cut or eliminated their dividend payouts entirely. Today we have identified two Canadian energy stocks that we believe will be next to reduce or stop paying their dividend.
*Returns are based on closing stock prices as of April 22, 2020
Husky Energy (TSX:HSE) – $3.84
Husky Energy is a Canadian integrated energy company headquartered in Calgary, Alberta, operating in Western and Atlantic Canada, the United States and the Asia Pacific region, with upstream and downstream business segments. Husky’s thermal production in its Integrated Corridor includes a number of projects in the Lloydminster area of Saskatchewan and Alberta, along with the Tucker Thermal Project near Cold Lake, Alberta and the Sunrise Energy Project northeast of Fort McMurray, Alberta. Its offshore business includes the Asia Pacific and Atlantic regions. Husky also has a portfolio of oil sands leases, encompassing some 2,500 square kilometres in the Fort McMurray region of Alberta. On April 20, 2020, Husky Energy announced that it plans to reduce its 2020 capital expenditures by about 50% from its December 2019 guidance to $1.7 billion, while the Company’s Integrated Corridor upstream production will be cut by more than 80,000 barrels per day.
Canadian Natural Resources Limited (TSX:CNQ) – $18.87
Canadian Natural Resources has a diversified portfolio of assets, a mix of natural gas, light crude oil, heavy crude oil, bitumen and synthetic crude oil, in locations such as North America, the UK North Sea and offshore Africa. The Company lays claim to being the largest independent natural gas producer in Canada as well as the largest heavy crude oil producer. On March 18, 2020, CNQ said it will reduce its 2020 capital spending budget by $1.1 billion to approximately $2.96 billion. Canadian Natural Resources had about $1 billion in estimated cash reserves as at March 31, 2020, yet it ended 2019 with net debt of $20.8 billion.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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