New investors in the TSX index have almost certainly come across the three tickers included here. Famed for its attractively valued dividend-paying energy stocks, Canadian stock markets — most notably the TSX index — have a wide range of stocks to buy and hold for long-term gains. While oil prices themselves can fluctuate, causing oil stocks to be regarded as famously volatile, there are a few Canadian stock market beauties with a utilities crossover that offer stable dependability.
Here are three of the very best oil-weighted energy stocks to buy on the TSX index, all of which are generally recommended for new investors and seasoned pros alike. You’ll find that they are not listed in order of size or profitability: the data is there for you to make your own mind up as to which of them will fit best in your personal investment portfolio.
Suncor Energy (TSX:SU)(NYSE:SU)
Suncor Energy is, without a doubt, one of the most sought-after of Canadian oil stocks. With a meaty market cap of $75 billion and suitable P/E ratio of 17.4 times earnings, you can see why: with both defensiveness and decent valuation, it’s a great stock to buy and hold for the long term.
A one-year past earnings growth of 63.5% makes this a profitable stock that easily outperforms its industry average of -1.4% for the same period as well as its own five-year average past earnings growth of -3.4%. A dividend yield of 3.07% and debt level of 39.8% of net worth complete the stats for this very attractive stock.
A market cap of $73 billion puts Enbridge squarely in the same frame as Suncor Energy in terms of size and defensiveness, though a P/E of 28.7 times earnings means that it is not as good value at today’s price. A 36.8% one-year past earnings growth smashes the industry’s average of -1.4% for the same 12-month period and exceeds its own 32.9% five-year average past earnings growth. A superior dividend yield of 6.26% vies with high debt 90.9% of net worth, giving risk-averse investors something of a conundrum, however.
Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ)
Canadian Natural Resources’s market cap of $45 billion is a little lower than its two competitors above, though its P/E of 17.2 times earnings just beats Suncor Energy. Its one-year past earnings growth of 69.9% also beats Suncor Energy, as well as its own five-year average past earnings contraction by 11.5%. In terms of dividend yield, Canadian Natural Resources will pay you 3.61% on today’s price, though a debt level of 66% of net worth is higher than that of Suncor Energy, so be aware of the slightly higher risk.
The bottom line
Enbridge is a little expensive and has the highest debt of the three Canadian energy stocks listed here. Should you buy its stock? The fact is that, if you do buy Enbridge stock today, you’ll be locking in a nicely sized dividend yield; and, as with the other two oil-weighted stocks here, you’ll also be getting a nicely defensive ticker that can add a bit of backbone to your personal investment portfolio. Overall, Suncor Energy still looks like the best of the Canadian oil stocks to buy and hold.
