2 TSX Stocks That I Would Never Buy (and 1 Stock I Love)

It’s time to ditch losing stocks like Imperial Oil (TSX:IMO)(NYSEMKT:IMO) and Suncor (TSX:SU)(NYSE:SU) for the future leader of energy.

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It’s been a crazy year. The stock market crashed in March, only to roar back to new heights. Many investors remain bullish, while others see a massive crash ahead.

How should you invest in these troubled times? The same way you always have: maintain a long-term outlook and continue your investment contributions.

It might sound simple, but these two actions are proven wealth builders. Those that revert to short-term thinking or stop contributing money to their future usually end up losing.

Of course, you still need to stocks to invest in. Here’s a sneak peek into some stocks that will fail over the next decade, and one company that will win big.

Learn this hard truth

Want to peer into the future? It won’t involve fossil fuels, or at least as much as today.

According to BP, the world may have already reached peak oil demand. If this future becomes reality, energy stocks like Imperial Oil (TSX:IMO)(NYSEMKT:IMO) and Suncor will suffer.

“The shift reflects the profound effect that the pandemic, which brought travel and manufacturing to a near standstill, has had on global energy markets,” reports CNN. “Analysts think the crisis will accelerate the shift away from fossil fuels towards renewable forms of energy, particularly as governments and investors heap pressure on companies to tackle the climate crisis amid growing evidence of its devastating effects.”

This isn’t some radical environmental group grinding an axe against polluters. Rather, this is one of the biggest oil producers in the world saying the world is about to permanently change.

Like nearly every fossil fuel company, Imperial and Suncor rely on strong demand. That’s because both companies operate massive oil sands projects, which have some of the highest breakeven costs in the world.

According to some estimates, these operations don’t turn a profit unless oil is above US$40 per barrel. They’ making a razor-thin margin right now. That’s a big reason why both stocks are down more than 50% this year.

Of course, falling demand won’t happen overnight. This will be a multi-decade process. That’s not a tide you want to swim against.

This stock is the future

Oil may be dying, but energy usage is still on the rise. The only difference is that the world is shifting to other forms of power.

Over the last five years, $1.5 trillion was invested in renewable energy infrastructure. Over the next five years, investment should surpass $5 trillion. If you want to profit, finds stocks that benefit from this generational shift in capital.

If I could only buy one company, it would be Brookfield Renewable (TSX:BEP.UN)(NYSE:BEP).

Brookfield is already one of the largest renewable energy stocks on the market, giving it the scale and liquidity to capitalize on any global opportunity. It owns assets in multiple continents, and management plans on spending billions more in the years to come.

In 2020, Brookfield stock is higher by 50%. That’s the complete opposite of fossil fuel producers like Suncor and Imperial.

The shift to renewables is already in motion. Don’t miss out.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ryan Vanzo has no position in any stocks mentioned.

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