Crescent Point Energy Corp (NYSE:CPG) — This Canadian oil and gas producer is a standout because of its strong balance sheet and high, stable dividend yield. It is currently the largest holding in Guggenheim Canadian Energy Income ETF (NYSE:ENY).
Last week, analysts at Raymond James Financial, Inc. (NYSE:RJF) upgraded CPG stock to “outperform” from “market perform” and increased their target price to $34 from $32. They said that Crescent Point is “one of the only high-yielding energy names with a sustainable business model in a prolonged lower oil price environment.”
Despite the massive decline in crude prices, the company posted record Q4 revenues and production. And management said it could see cost savings in the 15%-20% range this year.
CPG stock has three big potential catalysts: The strong likelihood of a rebound in oil prices, a subsequent strengthening of the Canadian dollar (now at $0.78 U.S.), and it 10.3% dividend yield, which is paid monthly and should provide support for shares if oil prices do continue to fall.
Technically, even though CPG stock is in a bear market, there are signs that a bottom may be near. Buying volume has outpaced selling volume since the low at $18.38 in mid-December. CPG stock failed to hold above its 50-day moving average in the second half of 2014. But it penetrated it in February for the first time since it topped near $44 this summer.
Buy CPG stock under $21.50 with a target of $30. If this is met, investors could see a return of 40%, plus dividends.
