Comparison Q: Eric Nuttal appeared on BNN on Friday and he's very bullish on both MEG Energy and Enerplus. Do you still feel that there is a significant upside in oil stocks in general? What are your thoughts on these two stocks and what is the better investment now, quality gas stocks or quality oil stocks?
We think there is some upside left. 'Significant' upside is going to depend on whether the world slows down or not. IF China can recover economically, upside will be higher. MEG has very high leverage to oil, due to its reserves. The stock has doubled in 2022 but is only 5X earnings. If one is bullish on oil it is attractive. ERF is smaller, with a dividend, and looks generally fine to us overall. The balance sheet is strong and it is also fairly cheap. (5iResearch)