Canadians who are scrimping but would like to grow their little capital have cheap but profitable options on the TSX. Crew Energy (TSX:CR) has delivered parabolic returns (+398.21%) thus far in 2021, while Diversified Royalty (TSX:DIV) pays an over-the-top 8% dividend.
Believe it or not, you won’t spend more than $10 to purchase one share of each. The energy stock trades at $2.79 per share, while you can the royalty stock for only $2.77. Both stocks aren’t your typical investment choices, although you can meet your financial objectives with minimal cash outlay.
Rise from obscurity
Crew Energy rose from obscurity when crude prices started to climb in 2021. The small-cap energy stock was trading at $0.56 a year ago. Energy is TSX’s top-performing sector this year, and Crew Energy is among the top 10 best performers. Also, had you invested $5,000 on December 31, 2020, your money would have grown to $24,910.71, or a windfall of nearly $20,000.
Based on market analysts’ forecasts, the energy stock has upside potential between 46.95% and 115.05% in one year. This $458.38 million liquids-rich natural gas producer aims to achieve sustainable per-share growth. The ongoing concern is to complement its balanced mix of financially responsible exploration and development with strategic acquisitions.
In the nine months ended September 30, 2021, Crew Energy impressed investors with excellent financial and operational results. Total revenue (petroleum and natural gas sales) increased 140.95% to $229.69 million versus the same period in 2020. Its net income was $154.39 million compared to the $237.84 million net loss in the prior-year period.
On the operations side, Crew’s production increased 15.78% to 25,532 barrels of oil equivalent per day (boe/d). The average price was $71.26 per barrel — an 89.72% increase. According to management, the company is on track to meet its full-year annual production target of 26,000 to 28,000 boe/d.
Crew’s president and CEO Dale Shwed said the company benefitted from positive market developments in Q3 2021 because commodity prices reached levels unseen in recent history. Shwed added that Crew is now a pure-play Montney producer with an improved environmental profile following the sale of its Lloydminster heavy crude oil operations.
Generous dividend payer
Dividend Royalty is a cash cow given its ultra-high dividend offer. Assuming you hold $6,000 worth of shares in a Tax-Free Savings Account (TFSA), you’ll earn $480 in tax-free income without sweat. The $338.63 million multi-royalty corporation owns the trademarks of six well-managed North American businesses and franchisors.
Apart from AIR MILES, Mr. Lube, and Mr. Mike, the royalty pool includes Sutton, Nurse Next Door, and Oxford Learning Centers. Diversified derives royalty streams from these royalty partners. Its president and CEO Sean Morrison is happy with the positive trends in the businesses of DIV’s royalty partners this year.
The highlight after three quarters in 2021 was the 23.5% increase in revenue compared to the same period in 2021. Also, management raised its dividend by 5% and 4.7% in August and November, respectively. At $2.77 per share, the stock is up 25.91% year to date.
Crew Energy and Diversified Royalty are budget-friendly stocks. Would-be investors will have the best of both worlds — capital gains and income.