In the filter created this week for The Globe and Mail, we screened for Canadian energy stocks creating value for shareholders by using the following criteria:
- A return on capital equal to or greater than the market average of 5 per cent;
- An economic performance index change greater than or equal to zero over 12 months. The EPI is the ratio of return on capital to cost of capital. It gives shareholders an idea of how much return is generated from each dollar spent;
- Positive change in economic value-added (EVA) over 12 and 24 months. This measures the momentum of the wealth-creating ability of the company. EVA is the net operating profit after tax, or NOPAT, minus capital charge (cost of capital times the amount of invested capital);
- A positive sales change over 12 months.
Read more in this article written by Noor Hussain, Account Executive at Inovestor Inc.
