1 Cheap Energy Stock to Snag on the Dip

Canadian energy stocks have gained significant momentum in 2021 due to surging oil and gas prices. Fortunately, there are still some solid discounts in this space. Today, I want to look at one energy stock that just sent off a buy signal.

Enerflex (TSX:EFX) is a Calgary-based company that supplies natural gas compression, oil and gas processing, refrigeration systems, and electric power generation equipment to the oil and gas industry.

Shares of this energy stock have climbed 29% in the year-to-date period. However, the stock has plunged 5.6% in the week-over-week period.

The company unveiled its third quarter 2021 results on November 4. Enerflex’s operating income dipped in the year-over-year period due to high activity in Q3 2020, high SG&A over the prior year, and adverse foreign exchange impacts. However, bookings rose $23 million year-over-year to $191 million.

Higher commodity prices have led to improved cash flow in recent quarters. The company expects oil and gas demand to continue to recover as nations climb their way out of the worst of the COVID-19 pandemic. Because of this, Enerflex expects its customers capital expenditures to increase in the quarters to come. That should pique the interest of investors right now.

Shares of this energy stock last had a price-to-earnings ratio of 16. That puts Enerflex in favourable value territory. Moreover, it offers a quarterly dividend of $0.025 per share. This represents a modest 1.1% yield.