October 28, 2002; Add Encana to U.S. Portfolios

Hearing an investment advisor recently tell how his taxable client’s energy holdings were concentrated on low cost-basis stocks, we suggested that he buy Encana as a top quality natural gas enhancement to a traditional emphasis on major oils.  Checking our latest tables we see that the stock ranks in the middle of the Large Cap Natural Gas and Oil Group (Table L-1).  The ratio of Debt/Present Value is moderate at 0.28.  Knowing that Devon Energy (DVN), Anadarko (APC), Burlington and Encana are the leading independent natural gas producers on that list, we can also see that Encana has the largest market cap of the four.  We like Encana’s outlook primarily because of its historical concentration in Canada where the prospects are less developed and for its remarkable record of adding reserves not only in Western Canada, but also off Nova Scotia (a new source for Boston), the North Sea and in the U.S. Rockies, surprisingly.  As it trades in decent volume on the New York Stock Exchange, we expect it to become increasingly a favorite of U.S. investors.