At the beginning of 2021, I’d recommended energy stocks as oil and gas prices were on the rebound. Investors came into the New Year encouraged by rising vaccination rates. Moreover, there were hopes that countries would pursue a reopening and never look back. This positively impacted demand in the opening months of the year. Unfortunately, there have been some bumps in the road due to the rising Detla variant. Still, I’m bullish on this sector going forward. Today, I want to look at three energy stocks that offer nice value before we move into September.
Why you should buy-the-dip in this exciting stock
Precision Drilling (TSX:PD)(NYSE:PDS) is an Ontario-based company that provides oil and natural gas drilling and related products and services in North America and the Middle East. Its shares have shot up 94% in 2021 as of close on August 27. However, the stock has fallen off sharply since the middle of July. Now is a good time to buy this plunge.
The company reported its second-quarter 2021 results on July 22. Revenue rose 6% from the prior year to $201 million. Meanwhile, Precision Drilling saw its net loss expand to $76 million or $5.71 per share compared to $49 million or $3.56 per share in the previous year. While its jump in revenue is very encouraging, investors will want to see increased activity translate to earnings and lower debt in the quarters ahead.
This energy stock is trading in attractive value territory relative to industry peers. Precision Drilling is an exciting energy stock that has the potential to power growth in your portfolio in the 2020s.
Here’s a cheap energy stock to add before September
Enerplus (TSX:ERF)(NYSE:ERF) is another energy stock I have my eye on in the last days of August. This Calgary-based company is engaged in the exploration and development of crude oil and natural gas in North America. Its shares have climbed 81% in the year-to-date period. However, the stock is down 5.2% month over month.
The company unveiled its Q2 2021 results on August 5. Enerplus reported a record production of 115,351 barrels of oil equivalent per day – up 26% from the first quarter of 2021. Moreover, adjusted funds flow of $184 million outpaced its capital spending. The quarter reflects strong momentum for Enerplus as this sector has bounced back nicely.
This energy stock upped its quarterly dividend by 15% to $0.038 per share. That represents a 2% yield. Enerplus stock slipped into technically oversold territory in the second half of August. While it has since rebounded marginally, it’s not too late to snatch it up on the dip.
One more energy stock to target today
Vermilion Energy (TSX:VET)(NYSE:VET) is the third and final energy stock I want to zero in on today. I’d targeted this dependable stock back in May 2020. Its shares have climbed 62% year-over-year as of close on August 27. The stock is down 6.3% month over month.
The company unveiled its second-quarter 2021 earnings on August 16. Funds flow from operations rose 7% from the prior year to $173 million. Meanwhile, Vermilion generated $94 million in free cash flow. Vermilion’s stability and consistent cash flow have made it a strong target for investors on the hunt for dividends. However, turbulence forced the company to suspend its dividend in the spring of 2020.
It hopes to return to paying out regular dividends on the back of recent successes. Shares of this energy stock are coming off a descent to oversold levels. Like its peers, it is not too late to grab the discounted stock before September.
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 Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.