I have been thinking that I ‘need’ to add some energy stocks in my portfolio, given the huge rise in commodity prices that have occurred over the past few years. I was listening to a radio show this morning and the topic of day was energy stocks and the guest spoke about the fact that energy stocks were only going to go up. Although he did not suggest any stocks in particular due to rules his compliance officer enforces, he did mention that he is bullish on the oil sands projects.
Sidebar – Before you jump all over me please note that I rarely act on anything I hear on the radio or read in the newspaper. I have spoken about this a couple of time on this blog – acting blindly on advice from ‘gurus’ is never a good idea.
My dividend-reinvesting broker (Canadian Shareowners Association) offers a couple of different choices in the energy sector. They include:
| Investment | Dividend Yield |
| iUnits S&P/TSX Canadian Energy Index | 0.36% |
| Enbridge | 2.88% |
| Encana | 0.63% |
| Imperial Oil | 0.90% |
| Petro-Canada | 0.94% |
| Suncor Inc | 0.41% |
First thing I noticed on this cursory scan was the super low dividend yields. The only one that broke 1% was Enbridge, which is a pipeline company. In the sector recommended by the radio guy, Suncor would be the option as they have huge stakes in the oil sands in Fort McMurray. Not very exciting in terms of a dividend yield.
The next thing I checked was the track record in terms of dividend growth. The two companies that showed up on the Mergent Dividend Achiever list were Enbridge and Imperial Oil.
Based on this initial scan, I am going to do some initial research on Enbridge, Imperial Oil, and Suncor (based on the radio guy’s comments) to make sure the fundamentals are sound. As I don’t have the funds available right now to purchase another position I am going to just complete the due diligence. I will update you on the results of this shortly. If any of you have any comments about these three stock, please comment. I would greatly appreciate it.