It’s been a good week for patient investors who did not fold during the fall flop. The energy sector seems to have missed the bus, as it continues to limp along. Many of the underlying energy concerns, both domestic and international in nature, remain unresolved. This is precisely the time to survey companies with the energy intensive province of Alberta.
Starting things off is this RRSP portfolio favourite: Suncor Energy Inc. (TSX:SU)(NYSE:SU) is a Calgary-based energy company that is one of the biggest in Canada. It operates in refining and marketing in three provinces and one U.S. state. Being one degree of separation from the actual oil drillers has not been enough to keep the share price buoyant. It’s been a guilty by association verdict as the price of Western Canadian Select continues to languish. The pullback has been painful. From July’s highs, Suncor is down over 20%.
Suncor didn’t participate in Tuesday’s TSX Rally
I’d previously mentioned there were lots of bargains out there. That’s still the case. After months of languishing, printing and packing company Transcontinental Inc popped over 10% in one day, an example of one of the big winners for the day.
Meanwhile, most energy stocks didn’t see gains. Suncor shareholders will have to wait patiently for capital appreciation. Here’s one thing that could drive share price. Investors may not have noticed, but in November, the company announced plans to intensify the shares buyback program. Into the new year, the company intends to buy approximately 5% of the outstanding common shares to the tune of $3 billion.
Suncor has a ton of cash, but instead of gobbling up another smaller companies, its strategy is to make a bold vote of confidence in its own shares. This fact alone warrants Suncor as a top contender for investors’ watchlist.
Suncor could also turn things around in a hurry if 2019 goes according to estimates. Earnings-per-share are anticipated to rise 24% from 2018. Suncor goes ex-dividend on Dec 3rd, which is shareholders will receive one of the four slated $0.36 per share dividend payments to give a 3.3% yield.
And now for something completely different – but still on Calgary
I mentioned that Suncor is a portfolio favourite. But not all investors are interested in investing in the oil patch directly. Each investor should carve out their own path. But ignoring Albertan businesses is potentially a missed opportunity. There are ways to gain exposure to the growth happening in Alberta’s largest city. Minto Apartment Real Estate Investment Trust (TSX:MI.UN) is an Ottawa-based company and an offshoot of the phenomenal long-standing Minto Group, founded by four brothers in 1955.
The apartment division of the business went for initial public offering on August 13 2018 and it is a recognizable name for anyone who has spent time looking at new building constructions across Canada in major cities like Ottawa and Toronto.
The latest Minto action shows the company is increasing footprint in Calgary. According to a Nov. 22, 2018 press release announced, “the acquisition of two high quality, recently constructed, and strategically located Calgary buildings.” Other media sources are taking up Calgary’s real estate potential. A recovered energy sector will add to the Minto REIT excitement. So this stock is another one to watch.
Stay foolish!
