3 Energy Stocks to Buy for Top Income

Canadian investors should consider buying income stocks like Enbridge (TSX:ENB)(NYSE:ENB) at rock bottom prices on the Toronto Stock Exchange.

| More on:
Choose a path

Image source: Getty Images

Energy stocks may not be particularly popular plays today on the Toronto Stock Exchange. Falling demand due to COVID-19 and geopolitical volatility plagued the industry this year. Nevertheless, there are still some great energy stocks to buy.

Here are three top energy stocks to buy in November 2020.

Enbridge: A top dividend yield for income investors

Enbridge (TSX:ENB)(NYSE:ENB) fell to $33.06 during the March market sell-off from a 52-week high of $57.32. As of Friday, investors are trading the stock for $37.12 per share. The annual dividend yield is fantastic for income investors at 8.73%.

Enbridge is a Canadian energy infrastructure company with investments in crude oil, natural gas, and renewable energy sources. What makes this such a great stock to buy is the renewable power segment, which operates wind, solar, geothermal, and waste heat recovery facilities. As the world transitions to renewable energy from oil, Enbridge will profit from these innovations.

Enbridge stock is still trading near March 2020 lows given the risk surrounding its industry. Nevertheless, the dividend yield is fantastic at its current price. While the stock could theoretically fall further in value, buying this stock could be well worth the risk for long-term investors looking for t0p income stocks.

Suncor Energy: Attracting big investor interest

Suncor Energy (TSX:SU)(NYSE:SU) dropped to $14.02 during the March market sell-off from a 52-week high of $45.12. Investors are trading the stock for $15.50 per share at the time of writing. The annual dividend yield is higher than most savings accounts at 5.38%.

Suncor Energy also produces and markets crude oil globally for a variety of purposes. Like Enbridge, Suncor manages four wind farms in Canada. Renewable energy is the future and these firms have joined the green energy club to profit from energy sources other than oil.

In the second quarter, Warren Buffett’s Berkshire Hathaway increased its holdings of Suncor stock by about 5 million shares to 19.2 million shares of Suncor at a value of US$217 million. He isn’t the only billionaire investing in this energy company. Saudi Arabia’s wealth fund also purchased a large stake in the struggling energy stock this year.

Canadian investors should definitely keep an eye on Suncor stock with investors like these putting money into the firm. While it may not offer as high a dividend as Enbridge, it’s still worth your time.

Canadian Natural Resources: An energy stock with a bright future

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) fell to $9.80 during the March market sell-off from a 52-week high of $42.57. At the time of writing, investors are trading the stock for $21.90 per share. The annual dividend yield would be a great addition to your retirement portfolio at 7.65%.

Canadian Natural Resources produces crude oil, natural gas, and natural gas liquids. Like Suncor, Canadian Natural Resources is also attracting capital from unusual and noteworthy sources. When Saudi Arabia’s wealth fund purchased shares in Suncor, it also placed a gamble on Canadian Natural Resources.

This is remarkable because Saudi Arabia, as one of the world’s largest oil producers, is part of the reason why Canadian Natural Resources has struggled this year. When Russia and Saudi Arabia waged an oil price war in the aftermath of the COVID-19 pandemic, North American oil firms were hit the hardest. North American oil producers like Canadian Natural Resources face higher costs than Saudi competitors.

Perhaps the move was in good faith to North America that the Saudi and Canadian oil interests were aligned. Whatever the reason, Saudi money flowing into Canadian oil stocks is a good sign that these stocks might rebound in the future. While we wait for that day to come, Canadian Natural Resources also issues top dividends for your investment.

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 Debra Ray has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.

More on Dividend Stocks

a person prepares to fight by taping their knuckles
Dividend Stocks

TFSA Investors: 2 High-Yield Heavyweights Worth a Sizeable Investment

SmartCentres REIT (TSX:SRU.UN) and another high-yield heavyweight to buy now while rates and fears remain high.

Read more »

Growing plant shoots on coins
Dividend Stocks

Buy These 3 High-Yield Stocks With Healthy Payout Ratios

The payout ratio is a good way to understand a dividend-paying company’s financial stability, and it’s a good way to…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

Your Guide to the Best Monthly Dividend Stocks in Canada

Three of the best monthly dividend stocks in Canada have market-beating returns despite the elevated volatility in 2023.

Read more »

data analyze research
Dividend Stocks

Passive Income: How to Earn $1,191/ Per Year Tax Free

Make $1,191/year in tax-free passive income with these top TSX dividend stocks.

Read more »

Senior couple at the lake having a picnic
Dividend Stocks

3 Under-$30 Stocks That Pay Over a 5% Dividend Yield

These three dividend stocks below $30 could boost your passive income.

Read more »

grow money, wealth build
Dividend Stocks

2 Small-Cap Growth Stocks Worth Adding to Your Arsenal

While large-cap, blue-chip stocks make for the safest investments, there are plenty of small-cap growth stocks that offer safe and…

Read more »

A worker gives a business presentation.
Dividend Stocks

3 Blue-Chip Stocks to Hold Tight in a Fluctuating Market

These three Canadian blue-chip stocks can be good investments to hold in a volatile market to protect your self-directed investment…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

$25,000 in This Dividend Stock Pays You $1,920 a Year

Enbridge stock offers you a dividend yield of 7.7%, making it a top choice for income-seeking investors in 2023.

Read more »