Forget the price of crude. This juicy dividend payer is ripe for the picking…
As the price of oil has tanked over recent months, oil stocks across the board have taken a beating.
For example, the NYSE Arca Oil & Gas Index (XOI), which measures the performance of the oil industry by tracking changes in the prices of a cross section of widely-held E&P corporations, tumbled from a high of 1,730.19 on June 23, to a low of 1,335.64 on October 15.
But while these recent events have scared away boatloads of investors – causing many to run for the hills – contrarians have taken this opportunity to load up on dirt-cheap bargains that have fallen out of favor.
Top Dividend Stock To Buy Today:
One incredibly safe stock that yields fat dividends is a Top Stock Millionaire favorite: Canadian Oil Sands Ltd. (TSX:COS).
Today, the stock is trading at levels not seen since 2009 – when oil was trading at $50 a barrel. That’s cheap when you consider that the price of oil is around $75 – $80 right now.
Plain and simple, dividend investors should be snatching up this gem as quickly as possible.
Here’s the dividend info on the company:
- Dividend amount: $0.35 per share
- Date declared: October 30, 2014
- Shareholders of record on: November 21, 2014
- Date payable: November 28, 2014
- Next dividend declaration: January 29, 2015
- Dividend payment frequency: Quarterly
Canadian Oil Sands Limited is the largest joint venture owner (36.74%) of the Syncrude JV – a massive oil sands partnership that includes China’s Sinopec Oil Sands, Exxon’s Imperial Oil, Mocal Energy Limited, Murphy Oil Company Ltd., Nexen Oil Sands Partnership (now CNOOC), and Suncor Energy Oil and Gas Partnership.
The Syncrude Project is located near Fort McMurray, Alberta and consists of oil sands mines, utilities plants, bitumen extraction plants and an upgrading complex that processes bitumen into synthetic crude oil (SCO).
During the year ended December 31, 2013, Canadian Oil Sands share of Syncrude’s proved plus probable reserves was 1.7 billion barrels.
This is a senior production company with reliable leverage to higher oil prices.
I think COS is an attractive buy here and could get back to the mid $20s (in Canadian dollars) if crude prices rise.
At current levels, the company is being valued at under 11-times earnings and has not been this cheap since the depths of the economic crisis.
Keep in mind; the Syncrude project has proved plus probable reserves of 4.5 billion barrels of oil. By producing roughly 100 million barrels a year, the reserves would last 45 years.
If technology improves and Syncrude can convert contingent and prospective resources into reserves, that would add an additional 6.7 billion barrels bringing their total to well over 10 billion barrels of oil (4.2 billion net to COS).
That means the JV would hold more oil than the entire Eagle Ford shale play.
What’s more, with strong business fundamentals driving the company, COS pays out a nice quarterly dividend of 35 Canadian cents a share.
At current prices, that puts the annual yield above the 7% mark, which is very attractive given the low production risk with upside oil price potential.
Yours in profits,