Q: What are your thoughts on Birchcliff for the next 12 months ?
5i Research Answer:
We like BIR, with a cheap valuation and attractive dividend. The balance sheet is good and solid growth is expected. That being said, its fortunes depend on the price of natural gas, which is $2.75, down from a 52-week high of $10+. A hot summer (air conditioning) and/or cold winter (heating) could change this. But for 12 months it is a tough call. We think the dividend is attractive enough to hold the stock through the cyclicality of the sector, and consider it one of the better natural gas stocks in Canada.