Invest in These 5 Companies Supplying the Oil and Gas Industry

Here’s a good way to invest in the oil and gas industry without investing in the producers themselves.

| More on:
The Motley Fool

Want dividends via oil and gas, without investing in oil and gas producers? Consider these oil and gas field services companies for your portfolio instead.

1. Ensign Energy Services

Ensign Energy Services (TSX: ESI) provides Canadian, U.S., and international oilfield services. It’s one of the globe’s top land-based drillers and well-servicing providers for crude oil, natural gas, and geothermal wells. Additionally, Ensign has extensive expertise in directional drilling.

Presently, Ensign’s construction in progress includes 11 new automated drilling rigs, one new well-servicing rig, and eight major retrofits to existing drilling rigs.

In Q1 2014, Ensign declared a quarterly cash dividend on common shares of $0.1175 per share.

2. Gibson Energy

Gibson Energy (TSX: GEI) is an integrated service provider to the oil and gas industry in the U.S. and an independent midstream energy company in Canada. Recently, Gibson closed the purchase of Stittco Energy, a provider of propane equipment, service, and delivery to commercial, industrial, and residential customers in northern Manitoba and the Northwest Territories.

In May, Gibson Energy approved a quarterly dividend of $0.30 per common share. In 2013, Gibson paid total dividends of $134 million, or $1.10 per share, versus $106 million, or $1.01 per share, the year prior.

3. ShawCor

ShawCor (TSX: SCL) focuses on technology-based products and services for the pipeline and pipe services market and the petrochemical and industrial market.

ShawCor recently announced that Bredero Shaw, its pipe coating division, received a contract worth roughly U.S.$70 million from BP Exploration (Shah Deniz) Ltd. for and on behalf of the South Caucasus Pipeline Company. The contract is for coating services for the South Caucasus Pipeline Expansion project.

ShawCor recently declared a common share dividend of $0.15 per share. This is a 20% increase over the prior quarterly dividend.

4. Calfrac Well Services

Calfrac Well Services (TSX: CFW) is a pressure pumping services provider. It concentrates on leading unconventional natural gas and light oil plays in North America and strategic global markets. Moreover, the company has considerably increased its exposure to oil-focused fracturing services. In 2013, Calfrac was independently rated as having the No. 1 overall market share across five key Canadian unconventional plays.

In May, Calfrac announced a split of its common shares on a two-for-one basis. In Q1 2014, Calfrac declared a quarterly dividend of $0.25 per share.

5. National Oilwell Varco

South of the border, National Oilwell Varco (NYSE: NOV) is a supplier of equipment and components used in oil and gas drilling and production operations, oilfield services, and supply chain integration services to the upstream oil and gas industry.

In mid-May, National Oilwell Varco announced an increase in the regular quarterly cash dividend to $0.46 per share of common stock from $0.26 per share of common stock.

Company president and CEO Clay Williams said, “Even with this increase, our business model generates sufficient operating cash flow to allow future investment in strategic internal growth and acquisitions that will further strengthen our existing businesses.”

You don’t have to go “well deep” so to speak with producers to earn regular income from the oil and gas industry. Companies that supply the industry can supply your trading account as well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Michael Ugulini has no positions in any of the companies mentioned in this article.

More on Investing

A worker gives a business presentation.
Stocks for Beginners

2 Reasons to Buy Onex Stock Like There’s No Tomorrow

Onex (TSX:ONEX) stock has been a strong performer over the years, both in terms of growth and dividends that investors…

Read more »

Canadian Dollars
Stocks for Beginners

The Best Stocks to Invest $5,000 in Right Now

Are you looking to put some cash into the stock market? Here are three picks to put on your watch…

Read more »

calculate and analyze stock
Dividend Stocks

Got $1,000? 3 Dividend Stocks to Buy and Hold Forever

Dividend stocks like Restaurant Brands International (TSX:QSR) can pay substantial amounts of passive income.

Read more »

financial freedom sign
Bank Stocks

This Ridiculously Cheap Warren Buffett Stock Could Help Make You Richer

American Express stock is part of Warren Buffett's equity portfolio, and the stock trades at a steep discount in 2024.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Monday, February 26

After rising for two weeks in a row, the main TSX index is now at its highest level in more…

Read more »

stock analysis

Buy the Dip: 2 Stocks to Buy Today and Hold for the Next 5 Years

These Canadian stocks are trading at discounted valuations, providing an opportunity for buying the dip.

Read more »

bulb idea thinking

Safety in Size? 2 of the Bluest Blue-Chip Stocks I’d Buy Now

TC Energy (TSX:TRP) and another cash cow have huge dividend yields for safe investors.

Read more »

A cannabis plant grows.
Cannabis Stocks

Can Aurora Cannabis Stock Recover in 2024?

Aurora Cannabis stock is down 99% from all-time highs but remains a high-risk bet, despite its cheap valuation.

Read more »