CNQ: Too Bad About the Price

VALUATION MODEL FOR CNQ

The Model

We'll start by looking at CNQ's value relative to the group and then we'll look at it's dividend yield relative to its five year average.

Group Valuation Metrics

We're looking at four valuation metrics and then ranking them from best to worst. The ranks are summed and a final rank is calculated.

Security	Price to Book Rank	Price to Sales Rank	PE Ratio Rank	EV/EBITDA Rank	Sum	Final Rank
CNQ	0.0132 3	1.9171 5	17.86 3	5.92 4	15	2
CVE	.009 4	.5659 10	na (negative) 1	23.14 2	17	4
HSE	.0054 9	.6423 9	7.12 8	4.68 6	32	10
ECA	.0076 6	1.06 7	5.09 10	3.93 8	31	9
ALA	.0089 5	.739 8	na (negative) 1	na (negative) 1	15	2
TOU	.0052 10	2.7331 1	10.099 6	6.50 3	20	5
VET	.0142 2	2.6826 2	12.5324 4	5.87 5	13	1
PXT	.0196 1	2.4163 3	6.8331 9	2.45 10	23	6
VII	.0063 8	1.2609 6	7.57 7	3.24 9	30	8

ARX

.007
7

2.0627
4

11..87
5

4.50
7

CNQ doesn't look like good value relative to its peers.

Dividend Yield Relative to 5 Year Average

A rule of thumb for this metric is to only purchase a stock when it's current dividend yield is lower than its 5 year average, or in other words, less than one in the calculation forward dividend yield divided by 5 year average.

CNQ looks overvalued at the moment, not surprising, too bad I didn't get to this analysis last week.

Comments

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I created a portfolio of stocks in the alternative energy sector, looking specifically for companies with a market cap over $1B but less than $4B. This is a sweet spot that offers strong potential for growth but is also substantial enough not to be too speculative.

It's my believe that alternative energy is on the ascendance, where as fossil fuels will inevitably decline (NextEra isn't a pure play in this regard however, natural gas assets are part of its portfolio). If you share this belief and you want exposure to this market, NextEra looks like a good bet.

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