8 Stocks Benefiting From North America's Energy Boom
Here are eight stocks cited by S&P Capital IQ as being poised for long-term gains based on North America's booming oil production, arranged in inverse order of analysts' most positive ratings:
Company profile: TransCanada, with a market value of $29 billion, is one of the largest pipeline operators in North America with more than 37,000 miles of natural gas pipelines. Although the U.S. government recently tabled the company's request to build an extension to its existing Keystone pipeline (Keystone XL), which would connect Canadian and North Dakota oil to the Gulf Coast and the refineries there, that project could get approved under a new presidential administration and be completed within a few years.
Dividend Yield: 4.16%
Investor takeaway: Its shares are down 5.2% this year, but have a three-year, average annual return of 14% and a 10-year annual return of 13%.
Analysts give its shares two "buy" ratings, three "buy/holds," 10 "holds," and one "weak hold," according to a survey of analysts by S&P. S&P has it rated "buy" with a $49 price target, which is a 20% premium to the current price.
S&P says: "We think its ability to boost volumes from oil sands, exploit gas opportunities and provide low-cost generation in Alberta will drive cash flow and earnings growth."
Company profile: Enbridge, with a market value of $30 billion, owns one of North America's largest crude-oil pipeline networks, connecting Alberta's oil sands with refineries in the Midwest. It also owns natural gas pipelines as well as Canada's largest gas distribution utility.
Dividend Yield: 2.97%
Investor takeaway: Its shares are up 3.5% this year and have a three-year, average annual return of 31%, and over 10 years the annualized return is 19%.
Analysts give its shares two "buy" ratings, six "buy/holds," five "holds," and one "weak hold," according to a survey of analysts by S&P. Morningstar says: "Enbridge's assets produce steady cash flows with little sensitivity to volumes or commodity prices, and their regulated rates virtually ensure profitability."
6. Spectra Energy(SE)