As Oil Breaks US$66 These Companies Offer the Highest Upside!

With oil on the rise, shares of Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) may be ready to rock once again!

| More on:

Although the price of oil has risen by close to 10% over the past month, many securities whose profits are derived from the industry remain at levels that are very attractive to investors with a higher-than-average risk/reward profile. The major condition to making a large amount of capital appreciation from these names is that oil continues to rise in value.

The first name to consider is none other than Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG). At more than $11 per share, Crescent Point has shown the market just how much it can bounce when oil decides to head north. Oil has increased by 10%, and shares of this oil development company have increased by close to 22%, which has had the effect of reducing the dividend yield. Near its 52-week low, the company offered investors a yield which was paid monthly of almost 4%; the yield has declined to 3.25%, yet it remains very attractive. To make this security even more attractive on a long-term basis, investors should note that it trades at a 30% discount to tangible book value.

The second name is Baytex Energy Corp. (TSX:BTE)(NYSE:BTE), which does not pay a dividend, but remains at a large discount to tangible book value. Although shares have increased by 20% over the past month, the upside remains close to 100% should the stock return to its book value.

Although many oil companies remain heavy with assets that depreciate annually, it must be noted that with current oil prices of more than US$65 per barrel, any capital expenditures will act as a proxy for the value of the company. Effectively, the assets will be worth their carrying values, as there will once again be buyers.

The final high-risk/high-reward stock for investors is none other than Bonterra Energy Corp. (TSX:BNE). As a smaller player, Bonaterra has been overlooked in the past month. Although the market capitalization of this company is around the $500 million mark, the reality remains that once investors uncover this hidden gem, the share price could catapult higher very quickly. At a current price of $14.69 per share, there remains close to 35% upside over the long term.

Until the full value of this company is realized, investors will have to remain content with a dividend yield of 8%, which is currently paid on a monthly basis.

With so many excellent opportunities for large gains in the oil sector, investors may need to be careful to ensure that their portfolios remain properly diversified among asset classes.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ryan Goldsman has no position in any of the stocks mentioned.

More on Energy Stocks

man touches brain to show a good idea
Energy Stocks

1 No-Brainer Energy Stock to Buy With $500 Right Now

Should you buy a cyclical energy stock at its decade-high? Probably not. But read this before you make a decision.

Read more »

A solar cell panel generates power in a country mountain landscape.
Energy Stocks

Top Canadian Renewable Energy Stocks to Buy Now

Here are two top renewable energy stocks long-term investors can put in their portfolios and forget about for a decade…

Read more »

oil and gas pipeline
Energy Stocks

Where Will Enbridge Stock Be in 3 Years?

After 29 straight years of increasing its dividend and a current yield of 6%, here's why Enbridge is one of…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Enbridge Stock a Buy, Sell, or Hold for 2025?

Enbridge stock just hit a multi-year high.

Read more »

oil pump jack under night sky
Energy Stocks

Where Will CNQ Stock Be in 3 Years?

Here’s why CNQ stock could continue to outperform the broader market by a huge margin over the next three years.

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Is Imperial Oil Stock a Buy, Sell, or Hold for 2025?

Valued at a market cap of $55 billion, Imperial Oil pays shareholders a growing dividend yield of 2.4%. Is the…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Where Will Imperial Oil Stock Be in 1 Year?

Imperial Oil is a TSX energy stock that has delivered market-thumping returns to shareholders over the last two decades.

Read more »