Today we’ve drilled down and discovered some Canadian energy stocks with an average three-year CAGR of +41.6% in levered free cash flow
SmallCapPower| April 15, 2019: Free cash flow (FCF) is a useful metric to identify a company’s actual profit margins. Today, we have used levered FCF, which measures the discretionary net cash flows a company can distribute to its shareholders after meeting interest and tax obligations. The Canadian energy stocks we’ve dug up have seen price momentum and impressive levered FCF yields.
*Share prices as at April 11, 2019, data obtained from S&P Capital IQ
Enerflex Ltd. (TSX:EFX) – $19.57
Enerflex is a single source supplier of gas processing, natural gas compression, oil, electric power generation equipment, and refrigeration systems. The Company’s broad resources and expertise provide it with the capability to engineer, manufacture, design, construct, and service hydrocarbon handling systems. On February 21, 2019, the Company announced Q4/18 and year-end financial results, highlighted by revenue of $1.7B for the fiscal year, a 9.6% increase from the year prior.
- Market Cap: $1.7 Billion
- 7-Day Total Return: +0.4%
- 30-Day Total Return: +1.5%
- 2015 Levered Free Cash Flow: $13.6 Million
- 2018 Levered Free Cash Flow: $44.4 Million
- Levered Free Cash Flow, 3-Year CAGR: +48.4%
Parex Resources Inc. (TSX:PXT) – $21.85
Parex Resources engages in crude oil exploration, development, and production in Colombia. Through its subsidiaries, the Company holds interests in ~1.6M net acres of onshore exploration and production blocks. Parex is currently conducting activities in the Llanos and Magdalena Basins in Colombia. On February 7, 2019, the Company announced it has seen a 24% growth in its developed producing reserves. On March 6, Parex released its FY/18 results, highlighted by annual oil and natural gas production of 44,408 barrels of oil equivalent per day, a 25% increase over 2017.
- Market Cap: $3.3 Billion
- 7-Day Total Return: +3.1%
- 30-Day Total Return: +2.8%
- 2015 Levered Free Cash Flow: $52.2 Million
- 2018 Levered Free Cash Flow: $332.5 Million
- Levered Free Cash Flow, 3-Year CAGR: +83.5%
Crescent Point Energy Corp. (TSX:CPG) – $5.36
Crescent Point Energy is a North American oil producer that engages in the development of high return resource plays. The Company aims to enhance shareholder returns through growing its asset base in the Viewfield Bakken, Shaunavon, Flat Lake, Uinta Basin and East Shale Duvernay plays. On March 7, 2019, the Company announced operating and financial results for FY/18, highlighted by over $400M of excess cash flow to be available in 2019.
- Market Cap: $2.9 Billion
- 7-Day Total Return: +29.2%
- 30-Day Total Return: +37.8%
- 2015 Levered Free Cash Flow: $811.2 Million
- 2018 Levered Free Cash Flow: $1.1 Billion
- Levered Free Cash Flow, 3-Year CAGR: +10.1%
Gibson Energy Inc. (TSX:GEI) – $23.46
Gibson Energy is a Canada-based oil infrastructure company that engages in the storage, optimization, processing, and gathering of crude oil and other products. The Company operates through four segments: infrastructure, logistics, wholesale, and other. On March 4, 2019, Gibson Energy announced its operating and financial results for Q4/18 and FY/18. Its infrastructure segment full-year performance reached $283M, a 20% increase over FY/17, and its wholesale segment saw a profit of $211M, a $180M increase from FY/17.
- Market Cap: $3.4 Billion
- 7-Day Total Return: +0.9%
- 30-Day Total Return: +3.7%
- 2015 Levered Free Cash Flow: $101.1 Million
- 2018 Levered Free Cash Flow: $194.7 Million
- Levered Free Cash Flow, 3-Year CAGR: +24.4%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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