Q: What is the 6 month outlook for Canadian oil producer shares such as SU?
5i Research Answer:
Anything can happen within a 6-month timeframe, that we can’t predict with certainty. However, most oil-related companies tend to perform well in a decent oil price environment. Although crude oil has been under pressure since the beginning of this year due to recessionary concerns, we think with the production cut from OPEC and oil-producing countries, oil could be stable till the end of this year.
We like the fact that these oil companies are repurchasing shares significantly such as SU, IMO, and TOU. We think these names could perform well three or five years from now. SU is very cheap with a 5.4% dividend. We think it could be a bit higher (5% to 10%) by year end, assuming the energy sector does not roll over for some reason.