Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Consider Buying These Energy Players Despite Headwinds: Suncor Energy Inc. (USA) (SU) and More

Page 1 of 2

If you are as bullish as I am about the energy sector, it makes sense to buy stock in companies throughout the entire value chain. The means buying stakes in upstream, midstream, downstream, and (we can’t forget) oil field services. Below, I review two stocks in different industries within the energy sector. My focus is on analyzing their strengths and weaknesses to assist the reader in making an informed investment decision.

Opportunities & Risks for Halliburton Company (NYSE:HAL)

Despite challenges from volatile guar gum prices and overcapacity in domestic driller, there exists a multitude of opportunities for Halliburton. The first one has essentially consistently been boosting its dividend distribution over more than the last six decades, and this is not expected to change any time soon. It is also encouraging to see that earnings per rig has been rising, even in North America. In 2008, the company earned $3.69 million for each rig, and this figure has since changed to $6.46 million.

Halliburton Company (NYSE:HAL)Halliburton has had several strategic acquisitions, all of which were aimed at improving the product portfolio to provide a full suite of compelling services to upstream producers. A recent example of a strategic acquisition by this company is the buyout of Petris Technology Incorporated. This firm provides innovative solutions that help oil & gas companies optimally manage reservoirs. It will be particularly helpful for Chinese energy companies that are seeking to tap into their country’s rich proven reserves of shale gas. Halliburton has a leading expertise of fracking in the United States and thus is an optimal partner for emerging market players. It has experience in all of the known major sites.

Despite these opportunities Halliburton faces some threats. The first threat is the fierce competition that exists among oil field service companies. All the companies in the industry are pushing to pass on lower costs, which has devastated margins at a time when basins are being crowded and natural gas prices are low. Further, the company is exposed to unfavorable government regulations that can negatively affect the expansion of the company. I would argue, however, that much of the downside has been factored into the stock price, since Marcellus Shale production, for example, is only likely to go up from fracking bans being lifted.

Why You Should Buy Suncor Energy Inc. (USA) (NYSE:SU)

Suncor is a Canadian company specialized on the oil sands, which is facing pressure from excess supply. Management has helped reduce risk by providing a generous capital allocation policy. By the third quarter of 2012, the company had managed to repurchase shares worth $1.5 billion. Shortly after, the company announced that it was going to start another share repurchase program worth $1 billion. Dividends increased by 18% per share, and there is the expectations for more increases in the future.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!