Three Canadian companies were added to RBC’s “Global Energy Best Ideas” list for December on Thursday.
The group, which now consists of 21 stocks, is meant to highlight the firm’s “highest conviction names” across the global energy sector with the expectation of outperforming m the iShares Global Energy ETF and a hybrid benchmark with a weighting towards the iShares Global Utilities ETF
“In November the RBC Global Energy Best Ideas List was down 0.3 per cent compared to the iShares S&P Global Energy Sector ETF (IXC) up 0.5 per cent and a hybrid benchmark (75-per-cent IXC, 25-per-cent JXI – iShares Global Utilities ETF) that was up 2.1 per cent on a sequential basis,” it said. “Since its inception in February 2013, the RBC Global Energy Best Ideas List is up 157.6 per cent compared to the S&P Global Energy Sector ETF up 30.1 per cent.”
Additions to the list included:
* MEG Energy Corp. (MEG-T) with an “outperform” rating and $33 target. Average: $31.04.
Analyst Greg Pardy: “We are adding MEG Energy to the Energy Best Ideas list following its significant progress when it comes to balance sheet deleveraging, with direct implications on increasing shareholder returns. Additionally, the company’s strong operating performance, coupled with its multi-year growth strategy and the benefits TMX should afford oil sands producers, make MEG our favorite intermediate producer.”
* Northland Power Inc. with an “outperform” rating and $28 target. Average: $31.75.
Analyst Nelson Ng: “We are adding Northland Power to the Energy Best Ideas as we believe the company is in an advantaged position relative to peers, with three fully funded projects under construction that should generate EBITDA equivalent to 50 per cent of 2023 levels. With financial close achieved on all three projects, the developments are fully funded, significantly de-risked, with fixed interest rates, hedged currency exposure, and the vast majority of construction costs are fixed. Pursuing incremental growth opportunities would be entirely discretionary.”
* Pason Systems Inc. with an “outperform” rating and $19 target. Average: $16.43.
Analyst Keith Mackey: “We are adding PSI to the Energy Best Ideas list following its announcement to acquire the remaining outstanding shares in Intelligent Wellhead Systems (IWS), which provides a differentiated growth opportunity and an opportunity for Pason to apply its competencies in land drilling to well completions.”
Canadian companies remaining on the list are:
- AltaGas Ltd. with an “outperform” rating and $32 target. Average: $32.
- ARC Resources Ltd. with an “outperform” rating and $28 target. Average: $27.48.
- Canadian Natural Resources Ltd. with an “outperform” rating and $96 target. Average: $99.24.
- Obsidian Energy Ltd. with an “outperform” rating and $15 target. Average: $13.55.
- Pembina Pipeline Corp. with an “outperform” rating and $58 target. Average: $51.
- Suncor Energy Inc. with an “outperform” rating and $53 target. Average: $54.86.
- Superior Plus Corp. with an “outperform” rating and $15 target. Average: $13.23.
- Topaz Energy Corp. with an “outperform” rating and $26 target. Average: $27.89.
- Tourmaline Oil Corp. with an “outperform” rating and $86 target. Average: $84.03.