Today we have identified some TSX oil and gas stocks with market caps under $2B and annual dividend yields above 7.0%
SmallCapPower | January 16, 2019: The recent slowdown in WTI crude oil prices has had a negative impact on share prices of Canadian oil & gas companies. The Horizons Canadian Midstream Oil & Gas ETF (TSX:HOG) is down -12.0% since its most recent peak in late August 2018. However, lower share prices result in higher dividend yields, if the Company can maintain its dividend payout. Today, we have identified four TSX oil and gas stocks with market caps under $2B and annual dividend yields above 7.0%.
*Share prices as at close January 14, 2019, data obtained from S&P Capital IQ
Peyto Exploration & Development Corp. (TSX:PEY) -$7.80
Oil and Gas
Peyto Exploration engages in the exploration, development, and production of oil & natural gas wells in Canada. The Company’s leading oil & gas properties are in Alberta’s Deep Basin. As of December 31, 2017, it had a total proved plus probable reserves of 722 million barrels of oil equivalent. Production is weighted approximately 89% to natural gas and 11% to oil & natural gas liquids. PEY pays a $0.06 monthly dividend (9.2% annual dividend yield).
Annual dividend yield: 9.2%
- 1-Month Stock Price Return: +6.0%
- 1-Year Stock Price Return: -43.6%
- Market Cap: $1,286.0 million
- Average Volume (30 days): 1,025,000 shares
Ensign Energy Services Inc. (TSX:ESI) – $5.32
Oil & Gas Services
Ensign Energy provides oilfield services in Canada, the U.S., and globally. The Company offers shallow, intermediate, and deep well drilling, as well as specialized drilling services. ESI provides directional drilling and related services for shallow-to-deep wells, and bottom hole pump changes to oil and natural gas producers. Additionally, the Company rents drill strings, loaders, tanks, pumps, rig matting, blow-out preventers, waste bins, and wastewater treatment equipment. As of December 31, 2017, the Company owned and operated a fleet of 201 land drilling rigs, 27 specialty rigs, and 110 well servicing rigs. On November 27, 2018, Ensign announced that it had acquired 56.4% of Trinidad Drilling’s (TSX:TDG) shares, and when combined with the shares ESI already owned it represents a ~66.2% ownership.
Annual dividend yield: 9.0%
- 1-Month Stock Price Return: +23.5%
- 1-Year Stock Price Return: -28.6%
- Market Cap: $835.6 million
- Average Volume (30 days): 270,000 shares
AKITA Drilling Ltd. (TSX:AKT.A) -$3.85
Oil & Gas Services
AKITA Drilling provides contract drilling services to oil & gas, and potash producers in Canada and the U.S. The Company offers purpose-built drilling rigs, as well as conventional and specialized drilling services. It is also involved in other forms of drilling-related to potash mining and the development of storage caverns. As of December 31, 2017, it owned and operated 28 drilling rigs, including 15 in Alberta, six in British Columbia, and six in Saskatchewan, as well as one in Odessa, Texas. AKITA pays a quarterly dividend of $0.085 (annual yield 8.8%).
Annual dividend yield: 8.8%
- 1-Month Stock Price Return: -4.7%
- 1-Year Stock Price Return: -50.5%
- Market Cap: $153.5 million
- Average Volume (30 days): 7,000 shares
Freehold Royalties Ltd. (TSX:FRU) -$8.67
Oil & Gas Royalties
Freehold Royalties is an oil & gas royalty company, which owns working interests in oil, natural gas, and potash properties in Western Canada. The Company holds approximately 6.1 million gross acres of land from northeastern British Columbia to southern Ontario. FRU has interests in ~42,000 wells and receives a royalty from industry operators. In its Q3 FY2018 earnings release, Freehold announced it had closed its purchase of GORR lands across 109,000 acres of land with prospectivity for the Clearwater formation in the Jarvie and Nipisi areas of Alberta for $12 million in September 2018.
Annual dividend yield: 7.3%
- 1-Month Stock Price Return: +8.1%
- 1-Year Stock Price Return: -40.7%
- Market Cap: $1,026.6 million
- Average Volume (30 days): 503,000 shares
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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