Making sense of the markets this week: January 18, 2021
These are two major players that also offer very attractive dividends at near 6% for TC Energy and Enbridge is above 7%. Their stock prices remained depressed. That’s good news for those seeking to build that dividend stream by way of reinvestments. But of course the stocks have not been strong contributors to total returns over the last several years.
Also, one can access the oil and gas producers by way of iShares XEG.
I am still long Enbridge and TC Energy. I’m happy to collect those dividends but would certainly welcome some price appreciation in the future. Stock prices have begun to tick up. Only time will tell if that’s the beginning of a larger trend.
Oil prices continue to surge
Also on the energy front, you may have noticed that it costs a little (or a lot) more to fill your tank these days. That’s thanks to rising oil prices, which, in the U.S., recently hit a 10-month high thanks to the promise of production cuts by OPEC (Organization of Petroleum Exporting Countries) and a weak U.S. dollar.
U.S. oil (WTI) has increased some 47% from Nov. 1, when we first received the very positive COVID-19 vaccine reports. As I write this on Thursday morning, Jan. 14, Canadian crude is up over 4% to $39.41, a one-year high according to OilPrice.com. Over the last month, the price has increased 19%.
The oil sector will benefit greatly upon successful vaccine delivery. There is incredible pent-up demand for travel by ground and air. More may hop in their cars and head back to work at their office locations. But, as we touched on last week, that successful vaccine delivery is the wild card in 2021.
This might be one of the more pure plays that benefits from a return to normal. And it would also deliver a needed boost for the Canadian economy.