Article... "After a significant drawdown since last month, TSX energy stocks seem to calm a little last week. They will likely trend higher back again soon on the expectations of strong Q2 numbers. Surge Energy (TSX:SGY) is one such small-cap, oil-focused stock. Despite the recent pullback, SGY stock is currently sitting on a 100% gain for the year.
Surge Energy will report its Q2 2022 earnings on July 27. It will most likely report much higher earnings for the quarter, thanks to higher energy commodity prices. Surge expects to generate $191 million in free cash flows in 2022 with West Texas Intermediate (WTI) crude at $90 a barrel. With back-to-back quarters of strong free cash flows, Surge will likely be able to bring down its debt to a large extent.
It will pay a dividend of $0.42 per share this year, representing an annual yield of nearly 5%. It will be interesting to see if Surge raises its dividend further when it releases its Q2 numbers.
Even if recession fears loom, crude oil prices could continue to trade strong. Demand may not take much of a dent, but supply constraints are much more worrisome, which should send the prices higher."