Energy Stocks to Buy: PennWest Petroleum (PWE)
PennWest Petroleum (PWE), like SFY, is down 13% after a lackluster 2013. PennWest has been hit hard by low natural gas prices, and in all honesty, management was not executing very well. The solution to that is to replace management, which is what PennWest has done.
The new chairman and CEO are focusing on selling off noncore assets and by the end of 2014 expect to have shed $2 billion in assets. The cash will be used to shore up the balance sheet and focus on operations at its three best locations.
PWE stock is trading at about 40% of book value and management is committed to maintaining the dividend for now. Shares currently yield 7.2% at 14 cents quarterly, so as of right now, you will get handsomely paid while you wait for the turnaround to gain traction. However, it’s worth pointing out that the dividend was slashed from 27 cents midway through last year, so the dividend isn’t necessarily as secure as other payout champions.