BMO BMO energy analyst Randy Ollenberger is looking for further upside for domestic oil and gas stocks,
“We anticipate another quarter of strong free cash flow for the oil and gas group despite volatile commodity prices. The cash windfall has translated to a significant reduction in net debt and rising shareholder returns. With free cash flow continuing to pour in and balance sheets repaired, we expect the group’s total return to accelerate in the coming quarters, which could lead to a valuation re-rating for the sector. We believe that the downside risk to oil prices in 2023 from a recession is overdone and that the sector remains very attractively valued.”
The reference to total return implies more dividend income for investors in the sector.