Energy Stocks Stay Attractive Amid Volatility
The energy sector has been in focus recently due to rising inflation, uneven growth, and geopolitical risks. These factors have led to volatility in oil prices, making energy stocks an attractive option for investors.
Three companies from the Global Energy Sector Equities screener stand out: Vår Energi (OB:VAR), Aker BP (OB:AKRBP), and Imperial Oil (TSX:IMO).
Vår Energi is an independent upstream oil and gas producer focused on crude oil and natural gas liquids on the Norwegian continental shelf. The company has sizeable production, with stated breakevens around US$30 to US$35 per barrel of oil equivalent. However, it carries high leverage, an unstable dividend history, and governance concerns.
Aker BP is a pure-play oil and gas explorer and producer on the Norwegian Continental Shelf. The company has a portfolio of offshore fields and focuses on developing and operating these assets to supply oil and gas to international markets. Aker BP provides concentrated oil price exposure within a relatively stable Norwegian regulatory setting, but it carries high debt and a dividend yield near 7% that is not fully covered by earnings or free cash flow.
Imperial Oil is a Canadian integrated oil and gas company with sizeable upstream production and a large refining and chemicals footprint. The company gives investors direct exposure to crude and natural gas prices across the full value chain, but it relies heavily on carbon-intensive oil sands and has ongoing capital needs.