With news that Warren Buffet’s Berkshire Hathaway Inc. has taken a fresh stake in Suncor Energy (TSX: SU)(NYSE: SU) making for a strong buy signal, shareholders can expect to see the share price climb. Indeed, the whole Canadian energy industry could potentially rise further thanks to the famous investor’s bullishness on this one stock.
Its share price is up 3.88% in the last five days, while a large volume of shares in Suncor Energy bought by insiders in the last three months signals that insider sentiment is also positive. It’s a good all-rounder, too, with a positive five-year average past earnings growth of 9.1%, an acceptable debt level of 39.4% of net worth, and market-weight valuation indicated by a P/B ratio of 1.5 times book.
Parkland Fuel (TSX: PKI)
Is Parkland Fuel the opposite of nightmare fuel for a passive income portfolio? Far from being a TSX index energy also-ran, Parkland Fuel stock is up 3.12% in the last five days and enjoyed a significant one-year past earnings growth of 395.3%. A dividend yield of 3.12% dovetails nicely with a 35.5% expected annual growth in earnings, and there’s been some inside buying over the last three months.
Parkland Fuel’s P/E of 27.8 times earnings is higher than Suncor Energy’s ratio of 21.1 times earnings, and it’s likewise signaling per-asset overvaluation with a P/B of 2.9 times book. However, the yield and growth outlook are similarly pitched to Suncor Energy’s, which sums up why Parkland Fuel looks like a strong pick for a portfolio in need of a bit of extra punch.
TORC Oil & Gas (TSX:TOG)
More shares in TORC Oil & Gas have been bought by insiders than sold in recent months, although not particularly high volume. Still, this signals that insider confidence is at least positive, with the healthy TSX index ticker up 9.74% in the last five days. Indeed, as the industry buoys on investor confidence, TORC Oil & Gas seems an even better pick than it did a few days ago, when it was already looking like a breakout stock.
A very significant one-year past earnings growth makes up for a borderline five-year average, while a decent dividend yield of 5.97% ties in nicely with a 27.8% expected annual growth in earnings. TORC Oil & Gas has a healthy balance sheet, carrying an acceptable level of debt at 22.1% of net worth. It’s trading below book price with a P/B of 0.6 times book. With this mix of good value, positive outlook, and tasty dividend, it’s looking like a strong all-round buy for a passive income portfolio.
The bottom line
Offering ready diversification and a stolidly integrated business structure, Suncor Energy is still one of the best defensive stocks on the TSX index. A dividend yield of 3.92%, coupled with an encouraging 20.2% expected annual growth in earnings, adds to the reasons to buy and hold this TSX index super-stock. Meanwhile, TORC Oil & Gas also offers a strong play for newcomers, due to its undervaluation, overall health, and sizeable dividend yield, while Parkland Fuel is a good play for high growth matched with some passive income.
