Tou
money cash dividends
Written by Vineet Kulkarni at The Motley Fool Canada
Valuations will play a crucial part in 2022 amid expectations of higher interest rates. Investors should be particularly picky about investing in growth stocks. Here are three top undervalued TSX stocks to consider.
Tourmaline Oil
Canada’s largest natural gas producer Tourmaline Oil (TSX:TOU) is flush with cash, and more special dividends could come in 2022. The company delighted shareholders with a generous special and three ordinary dividend increases in 2021. More cash distribution could follow with expectations of higher free cash flow in 2022.
The company generates two-thirds of its revenues from natural gas. Tourmaline saw massive growth in cash flow from operations in the last 12 months. Higher gas prices driven by increasing demand boosted the energy company’s financials during this period.
In addition, higher operational efficiency expanded its profit margins in 2021. Interestingly, management expects $2.8 billion of free cash flow in 2022, a notable jump from $1.5 billion free cash this year.
If management’s view materializes, Tourmaline could well be in a position to issue a few more specials next year. Also, excess cash will likely further improve Tourmaline’s balance sheet strength as it did in 2021.
TOU stock has been one of the top gainer TSX stocks from the energy sector, gaining 135% in 2021. Importantly, the stock is currently trading seven times its earnings, indicating a huge growth potential.
Tourmaline Oil
Canada’s largest natural gas producer Tourmaline Oil (TSX:TOU) is flush with cash, and more special dividends could come in 2022. The company delighted shareholders with a generous special and three ordinary dividend increases in 2021. More cash distribution could follow with expectations of higher free cash flow in 2022.
The company generates two-thirds of its revenues from natural gas. Tourmaline saw massive growth in cash flow from operations in the last 12 months. Higher gas prices driven by increasing demand boosted the energy company’s financials during this period.
In addition, higher operational efficiency expanded its profit margins in 2021. Interestingly, management expects $2.8 billion of free cash flow in 2022, a notable jump from $1.5 billion free cash this year.
If management’s view materializes, Tourmaline could well be in a position to issue a few more specials next year. Also, excess cash will likely further improve Tourmaline’s balance sheet strength as it did in 2021.
TOU stock has been one of the top gainer TSX stocks from the energy sector, gaining 135% in 2021. Importantly, the stock is currently trading seven times its earnings, indicating a huge growth potential.