UPDATE: Alta Corp Capital Initiates Coverage on Encana Corporation with Sector Perform Rating, $22.50 PT

In a report published Friday, Alta Corp Capital initiated coverage on Encana Corporation ECA with a Sector Perform rating and $22.50 price target. Alta Corp noted, “We are initiating coverage of Encana with a 12-month target of US$22.50 and a Sector Perform rating. Encana currently pays a dividend of $0.20 /quarter, which it has kept flat since 2009, generating a current cash yield of 4.1%. From an economic perspective, we consider the dividend to be substantially a return of capital, as Encana has had to sell non-core assets and do property deals in order to sustain its ongoing operations. With natural gas prices above $4.70 /mcf, we estimate Encana could fund a $3.0 billion annual capital program, potentially hold production flat and the dividend becomes a return on capital.” Encana Corporation closed on Thursday at $19.48.