Husky Energy Could Resume Dividend, Analyst
Husky Shares Rise 2% Before Earnings Release
New York, NY—Husky Energy Inc. (TSE:HSE) surged two percent today amid speculations that the Calgary-based integrated oil and gas producer may resume its dividend later this year and might offload $200 million worth of non-core assets.
CIBC World Markets analyst Arthur Grayfer said in a research note that Husky could be due for a stock price jump as it has repositioned itself and could be preparing to reinstate the dividend. Husky will release its second-quarter earnings on July 22. (Source: “Husky Energy ‘cheap as chips’ and could reinstate its dividend,” The Financial Post, July 19, 2016.)
Grayfer, who believes that the “stock as cheap as chips” could offer some near-term outperformance, has a $19.00 price target for Husky. The stock traded at CA$15.44 on July 20, up more than two percent.
Husky suspended its dividend earlier this year as oil prices collapsed. Since then the company has been trying to consolidate its balance sheet by selling its assets.
“As a result of the structural changes that have taken place, Husky can generate enough cash to maintain current production levels with WTI oil prices in the mid-$30.00s. Oil prices above that point are expected to produce free cash flow,” the company said in a statement. (Source: “Husky Energy Positioned to Grow Profits,” Husky Energy, June 1, 2016).
An increase in WTI oil prices from $40.00 to $50.00 on an annualized basis is expected to generate about $800 million in free cash flow, the company said.
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners
Sign up to receive our FREE Income Investors newsletter along with our special offers and get our FREE report:
5 Dividend Stocks to Own Forever
This is an entirely free service. No credit card required. You can opt-out at anytime.
We hate spam as much as you do.