RE:RE:RE:RE:RE:RE:Kavern's Commentary...Q2I don't own any CJ. YGR is my ONLY oil & gas stock right now, based on my previous deep deep discount to book system. I only mentioned CJ because someone was asking for comparable o&g stocks to YGR in terms of a price double within a year. To my mind, CJ is the next best thing to YGR in that regard.
I believe fair value for Canadian dividend paying stocks that have an exceptional track record of growing their NAV per share and also have realistically priced the dividend for sustainability is a 3.9% yield. (This number will vary a bit daily based on market conditions). That is an average yield of all the companies I track that meet my "good" criteria - not on a "time-out". (currently 54 are above that number and 64 below - for Canada). Now if Cardinal were to have that 3.9% yield right now (and be fairly valued) then it's stock price would be $15.38. But because this sector is so hot right now, not only should it be fairly valued, it should actually be OVERvalued just like almost all of its peers are. Hence, the stock price double prediction of mine. That's not even considering all the extra good news that is sure to happen with that stock, like debt elimination and further dividend hikes - soon, VERY soon.
kavern23 wrote: Not that I hate Cardinal...just that such a large market cap at 9.20 for a company with Cardinal's attributes....and also what the upside at 9.20...even if cards fall "right" for it....
1. That company sucks in lower priced commodities, gets ugly as they have higher operationg costs..older wells.
2. And they are very exposed to heavy oil and that differential can blow out hard by year end due to heavy oil is the easiet thing to increase in Alberta. Clearwater to sparky by loyld. If oil goes to 100 and the differential is 25....get's hard for CJ to pay a 100 m divy a year.
Any type of divy cut even to 3 cents and stock gets pumelled. What share price are you waiting to reach 10...11.....you want to hold CJ for 5 years and collect the divy?
Just safer options.
I just think when companies like CJ or BNE start to pay dividends it is going to draw attention from Justin Trudeau...large ARO carrying companies paying divys?
Trudeau will want something back for the reclmaination grant.
This is the nice part of YGR. Basically no ARO too worry about.
Hungus wrote: So, 10% yield is your magic number then? Cardinal priced over $6 per share with their measely 60 cent per year dividend = avoid? And I thought I was tough on valuations...
I'm having trouble understanding how you think about this... CJ is expected to be debt free by the end of this year and I think I read somewhere they could sustain the dividend even if WTI went back down to the 50s. Just how low do you think oil should be priced at? Or do you really not believe that they can maintain enough production to pay investors 60 cents a year?
Any Canadian stock paying 4% yield or higher right now is undervalued (if it's sustainable for that company, of course). As of today's close, the average yield on my Canadian watchlist for consistent balance sheet growers is 3.9% (my USA watchlist average yield = 3.5%)
BTW, any of you swine even think of selling YGR again before August - I'll cut off your Johnson!
kavern23 wrote: Blinkie I meant avoid Cardinal from June 2 or at 9.20 level....not when it was under 6 bucks.
I have been one of the few people saying all along that oil prices will come down....plus 110 oil isnt sustainable even medium term.
Oil and gas analysts whther it is Josh Young or Eric...only know to be bullish.
I have been so hesistant to pull the trigger as since Russia attacked Ukraine the markets are so greasy. Dont care if I missed some profit opportunities....never want to lose.
So much speculators in the comoddity markets. Interest rate increases will teach them a lesson. A hard one.
Binkie wrote: Well done Kav!
What are your best and worst predictions for H2/22?
YGR is on fire, yesterday the oil patch was red but YGR was up 8%!
Cardinal has doubled this year and announced a healthy dividend, so imo you weren't correct on CJ