Finding top Canadian stocks that are undervalued in this market has become increasingly difficult. Indeed, certain sectors such as energy have seen a resurgence of late. Accordingly, picking a top energy stock that fits such a value profile is difficult.
However, in this improving commodity price environment, there are certain winners. One energy stock I have on my radar right now is Tourmaline Oil (TSX: TOU).
Let’s dive into why this could be the energy stock investors should consider right now.
Tourmaline Oil: An energy stock of the future
The future of greener, cleaner energy is quickly approaching. Accordingly, it may be surprising for an oil and gas stock to make the cut as an “energy stock of the future.”
However, that’s what Tourmaline Oil is.
As the world transitions to renewable energy sources, natural gas will be a key element of this transition. Natural gas is cleaner than most other fossil fuels while being energy dense. These properties are, at least in part, responsible for the rise in natural gas prices we’ve seen of late.
As a key producer of natural gas, Tourmaline Oil stands to benefit from the surging demand for this transitory fossil fuel. The company’s impressive production capacity combined with a world-class management team makes for a winning combination.
Indeed, there are few energy stocks better positioned for the future than Tourmaline Oil.
Making the right moves
Tourmaline is a company that’s not standing still — not by a long shot. This company is a mover and shaker, and Tourmaline’s management team is always searching for ways to create value for shareholders.
The company’s acquisition of Black Swan is a big deal. This acquisition diversifies Tourmaline’s operations in two ways. First, Black Swan’s heating and power plant assets provide great vertical integration for the company. Second, these assets help Tourmaline gain more geographical spread across Canada.
Aside from operating leverage, Tourmaline also gains Montney acreage as a result of the deal. Additionally, various infrastructure components of this acquisition are attractive from a synergy standpoint.
Both organic and acquisition-based growth has spurred impressive efficiency, scale, and production reserves. Indeed, for Tourmaline shareholders, this has made this energy stock one worth considering right now.
Bottom line
I think Tourmaline Oil is an energy stock long-term investors should really consider right now. This company is positioned in the sweet spot of where demand will be in the energy sector.
Indeed, compared to other pure-play energy stocks in the market, Tourmaline looks like a safer medium-term bet right now. Those looking for a company with an excellent five-year investing time horizon have a good one in TOU stock.
