7 Best Canadian Stocks Under $20

3. Veren Inc. (NYSE:VRN)

Average Price Target Upside as of August 18: 47.47%

Share Price as of August 18: $7.35

Veren Inc. (NYSE:VRN) operates as an oil and natural gas exploration and producing company with operations mainly in the United States and Canada. The company mainly focuses on the Exploration and Production (E&P) segment of the industry and searches for resources such as Crude Oil, Tight Oil, Natural Gas Liquids, and other related petroleum products.

Three main sites including Alberta Monteny, Kaybob Duvernay, and Saskatchewan produced 50%, 25%, and 25% of the company’s total production in 2024.

Veren Inc. (NYSE:VRN) is poised for growth, we say this not only because the company posted a successful Q2 2024, but has grown its revenue by 23% during the past 3 years. In Q2, 2024, the company generated $195 million in excess cash flow. The excess cash flow was driven by an impressive production rate of 192,500 barrels of oil per day. The production rate indicated a slight increase subsequently and was in line with the production guidance of 191,000 to 199,000 BOE per day. The success in production rates is attributed to strong performance in Alberta Montney and Kaybob Duvernay regions.

Management proved its discipline in allocating the excess cash flow by returning 60% of it to shareholders through dividends and buybacks. Whereas, 40% was used to reduce debt and in reinvestments. Since the start of 2024, Veren Inc (NYSE:VRN) has been able to reduce its debt by $800 million.

Should you invest in Veren Inc. (NYSE:VRN)?

The company has improved its production capacity and is on the road to achieving its production target. In addition, Veren Inc. (NYSE:VRN) has also improved its efficiency and operational cost. For instance, recent drilling results in the Montney Formation exceeded expectations, with some wells producing up to 1,300 BOE per day.

VRN is cheap at current levels and presents an attractive entry point. It is trading at 6 times its forward earnings, a 48% discount to its sector. Moreover, 13 analysts have a Strong Buy rating on the stock, with their 12-month median price target of $11 presenting an upside of 47.47% from the current level.