A lot of these companies are currently yielding pretty juicy dividends, which in a volatile market seems attractive, but I have some concerns.
From what I understand, many of these companies are now prohibited from engaging in further oil & gas exploration by federal moratoriums. They're operating in a sector that is going to face more and more political and regulatory headwinds in the future.
Further, it seems like a lot of them are putting virtually all their free cash into dividends and buybacks. Which sounds great in the short-term, but that means little to no money left over for innovation, growth, or a greener transition strategy. So what's the end game?
All that to say, while the dividends are appealing right now, many of these companies seem to be sleepwalking into a death spiral where they have no cash to innovate or transition to greener business models, at the same time as their current business models are slowly dying.
What's the bull case for oilsands stocks?
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