3 Best Energy Stocks to Buy as Oil Surges

Canadians should target energy stocks like Suncor Energy Inc. (TSX:SU)(NYSE:SU) as oil and gas prices rebound.

| More on:
consider the options

Image source: Getty Images

The energy sector took its fair share of lumps during the previous year. Demand for oil and gas plummeted as the COVID-19 pandemic forced new restrictions and shutdowns across the globe. Moreover, oil prices were also negatively impacted by infighting within OPEC. Energy stocks have bounced back nicely in early 2021. Sentiment for the oil and gas sector has improved on the back of a global economic rebound. Today, I want to look at the three best energy stocks to buy as favourable trends re-emerge for this sector.

This super energy stock is surging

Earlier this week, I’d looked at two heavyweight energy stocks that were on my radar. Suncor Energy (TSX:SU)(NYSE:SU) was one of the two energy stocks I’d suggested investors should snag this week. Its shares have climbed 16% month-over-month as of early afternoon trading on February 26. The stock is still down 32% in the year-over-year period.

Suncor released its fourth quarter and full year 2020 results on February 3. The company delivered a loss in Q4 2020 due to lower revenues and write downs. Still, things are looking up for Suncor and its peers.

This energy stock last possessed a favourable price-to-book value of 1.1. Suncor offers a quarterly dividend of $0.21 per share. That represents a 3.3% yield.

Pick up these shares as oil gains momentum

The price of WTI Crude was trading just below US$62 in early afternoon trading on February 26. I’d suggested that investors should snatch up Imperial Oil (TSX:IMO)(NYSE:IMO) as oil continued to gain momentum. Shares of Imperial Oil have climbed 13% in 2021 at the time of this writing.

Imperial Oil also unveiled its fourth quarter and full year 2020 results in early February. The company reported a steep net loss of $1.14 billion or $1.56 per share compared to net income of $271 million or $0.36 per share in the prior year. Imperial Oil continued to encounter headwinds due to lagging demand in Canada and abroad. However, there is reason for optimism on the back of the ongoing global recovery.

Shares of this energy stock last had a promising P/B value of 0.9. Imperial Oil offers a quarterly dividend of $0.22 per share, which represents a 3.1% yield.

The last energy stock I’d snag today

Cenovus Energy (TSX:CVE)(NYSE:CVE) is the last energy stock I want to focus on today. Its stock has increased 19% in 2021 so far. Like its peers, it has thrived to start the New Year due to improving oil and gas prices.

The Calgary-based oil and gas firm posted a net loss of $153 million in Q4 2020 – down from a profit of $113 million in the prior year. It sustained a non-cash hit of $100 million related to new U.S. President Joe Biden’s decision to cancel the pipeline’s permit on the first day he took office. Biden has proven to be a thorn in the side of Canada’s energy sector early on.

Shares of this energy stock possess a favourable P/B value of 1.1. It offers a quarterly dividend of $0.018 per share. This represents a modest 0.7% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Investing

Daffodils in bloom
Tech Stocks

2 Best “Magnificent Seven” Stocks to Buy in April

Two surging mega-cap tech stocks are the best buys among the “Magnificent Seven” this April.

Read more »

A golden egg in a nest
Stocks for Beginners

Got $5,000? 5 Stocks to Buy for Lasting Wealth

Got $5,000 to build a long-term compounding stock portfolio? Here are five top Canadian stocks to building lasting lifetime wealth.

Read more »

Businessman looking at a red arrow crashing through the floor
Dividend Stocks

BCE’s Stock Price Has Fallen to its 10-Year Low of $44: How Low Can it Go?

BCE stock price has dipped 39% in two years and shows no signs of growth in the next few months.…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Invest $10,000 in This Dividend Stock for $3,974.80 in Passive Income

This dividend stock gives you far more passive income than just from dividends alone, so consider it if you want…

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Can a 6% dividend yield help you build a monthly retirement income? An investment made right can help you build…

Read more »

Payday ringed on a calendar
Dividend Stocks

Passive Income: How Much Should You Invest to Earn $1,000 Every Month?

These three monthly-paying dividend stocks can help you earn a monthly passive income of $1,000.

Read more »

clock time
Tech Stocks

Up 47%, Is it Time to Buy Payfare Stock?

Payfare (TSX:PAY) stock has been rising higher in the last six months after dropping significantly since 2021. Is it time…

Read more »

Dividend Stocks

3 Dividend Stocks to Double Up on Right Now

Some of these dividend stocks will take longer to recover than others, but they'll certainly pay you to stick around.

Read more »