Crescent Point Energy (TSX: CPG)(NYSE: CPG) offers consistent dividends with a healthy yield of almost 6%. Here are five reasons to consider this conventional oil and gas producer as an investment.
1. Its diverse asset portfolio
In Canada and the U.S., Crescent Point Energy centres on accretive large oil- or gas-in-place acquisitions with stable production profiles and considerable development upside. The company has assets in Alberta, Saskatchewan, Manitoba, North Dakota, and Utah.
2. Its production increases and resource plays
For Q1 2014, Crescent Point’s production grew 11% to 130,580 boe/d from 117,663 boe/d in Q1 2013. In Q1, it drilled 223 wells. This was chiefly in the Viewfield Bakken resource play and the Shaunavon resource play, both of which are in southwest Saskatchewan.
The Viewfield Bakken resource play, a light oil reservoir, has a large, multi-year, low-risk drilling inventory. Shaunavon is a medium oil resource play. It is also a major source of multi-year, low-risk drilling inventory. Furthermore, Crescent Point is focusing its attention on emerging plays. These include the Beaverhill Lake light oil resource play in Alberta, as well as the Bakken/Three Forks in the U.S. The company has a considerable land position in Beaverhill Lake in the Swan Hills area of Alberta.
3. Its revenue increases
For Q1 2014, Crescent Point Energy’s crude oil and natural gas liquids sales increased 29%, from $770.2 million in Q1 2013 to $992.8 million. Natural gas sales increased 68%, from $21.5 million in Q1 2013 to $36.2 million in Q1 2014.
4. Its cash flow, operating income, and net income
For Q1 2014, cash flow from operating activities grew 25% to $574.1 million versus $459.2 million in Q1 2013. Operating income was $206.1 million versus $114.3 million in Q1 2013. The company realized net income of $30.9 million in Q1 versus a net loss of $1.6 million in Q1 2013.
5. Its dividends
This month, Crescent Point Energy declared a dividend of $0.23 per share to be paid in July, based on June 2014 production. The company’s current dividend yield is 5.85%. Its five-year average dividend yield is 6%. Its annualized dividend rate is $2.76.
How does this compare to others in the independent oil and gas industry? ARC Resources (TSX: ARX) has a 3.7% dividend yield and its dividend rate is $1.20. This month, ARC Resources confirmed a dividend of $0.10 per share for July 2014.
Husky Energy (TSX: HSE) has a dividend yield of 3.34%. Its five-year average dividend yield is 4.3% and its annualized dividend rate is $1.20. In May, Husky Energy declared a quarterly dividend of $0.30 per share.
With increases in production, revenue, cash flow, and operating and net income, as well as a nice dividend yield, Crescent Point Energy is worth a look if you desire an energy stock in your portfolio.
