Investors who are looking for some of the top Canadian stocks to buy today should definitely consider energy. Energy stocks have begun to rally rapidly as of the last few months. This was bound to happen, as energy stocks had been lagging the rest of the market. After being impacted quite severely during the coronavirus pandemic, the energy industry has yet to recover fully.
However, as vaccines are rolled out, and we slowly move toward a recovery, these businesses are starting to finally see a recovery in their share prices.
That’s making these stocks a buy today. However, although there are plenty of high-quality stocks to choose from, you don’t want to pick just any energy stock.
Investors should be focused on making a long-term investment. And given the impact the energy industry has faced, now is the time investors can buy these high-quality stocks at incredibly cheap values.
If you’re looking at energy stocks for the long term, some of the best stocks to buy are natural gas companies. Natural gas is the fossil fuel of the future. It’s a lot cleaner than coal and oil and will be crucial to the energy industry in the future.
So, although we are continuously using more renewable energy as a country, it will be decades before we are completely off fossil fuels, especially the clean ones like natural gas. This makes natural gas stocks some of the best Canadian energy companies to buy for the future. Here are two of the top stocks to buy today.
A top Canadian energy stock to buy today
If you’re looking at natural gas stocks to buy, some of the best growth potential can be found in natural gas producers. Natural gas producers are leveraged to the price of the commodity. So, as prices increase, these companies can see their profits skyrocket dramatically.
These stocks are highly volatile for this exact reason. When the price of natural gas falls, there is the risk of them being impacted.
That’s why if you want to invest in a natural gas producer, Peyto Exploration and Development (TSX:PEY) is the top Canadian stock to buy today.
Peyto is one of the lowest-cost producers in Canada. Its low-cost nature ensures the business would be one of the last standing in the worst-case scenario.
Plus, as prices increase, it allows the company to see higher profitability and cash flows, which is why it’s one of the best Canadian gas stocks to buy today.
Energy stocks have only begun to rally, and Peyto is one of the best. I wouldn’t wait too much longer to take a position, though. There are no signs these stocks are slowing down anytime soon.
A midstream and utility stock perfect for long-term investors
Another way to gain exposure to natural gas but with a lower-volatility investment is AltaGas (TSX:ALA). AltaGas is a diversified energy infrastructure company with highly resilient operations, making it a great Canadian stock to buy today.
The company does everything from gathering and processing natural gas to transporting it and storing it when needed. It also has a significant utility business that delivers clean and affordable natural gas to more than 1.5 million customers.
These operations are all highly defensive, making AltaGas a much lower-risk stock than Peyto. And while it doesn’t offer quite as much upside as Peyto, there is still significant potential in AltaGas over the long term.
Its relatively new Ridley Island Propane Export Terminal, for example, helps connect Canadian producers to growing Asian markets. This new growth project is promising both to AltaGas’s growth but also to the Canadian industry as a whole.
So, if you want to play the continuing growth of natural gas, AltaGas is one of the top Canadian stocks to buy today.
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Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends ALTAGAS LTD.