2 Energy Stocks That Are Going Gangbusters Right Now

The reopening economy and rising crude oil prices are sending the sector soaring before the winter comes along, and it could be the perfect time to buy these energy stocks.

| More on:
Oil pumps against sunset

Image source: Getty Images

The Canadian energy sector is currently going through its second bull run in the stock market this year. Surprisingly, the renewable energy industry is underperforming the traditional energy sector, as oil and natural gas stocks deliver stellar shareholder returns.

The temporary weakness in the renewable energy sector will likely and gradually make way for stronger returns in the future. Having a decent amount of exposure to the renewable energy sector is crucial for long-term gains. However, right now could be the perfect time to take advantage of a strong performance from oil and gas stocks.

The fundamentals for the traditional energy sector look quite strong, and the industry looks well positioned to sustain the strong momentum throughout the incoming winter freeze and well into next year. If you are just starting investing, getting exposure to both energy sectors could be a viable way for you to enjoy a significant return on your investment.

Today, I will discuss two traditional energy stocks you should consider adding to your portfolio amid the industry’s strong performance.


Enbridge (TSX:ENB)(NYSE:ENB) is one of the largest energy infrastructure companies operating in North America. The company boasts an extensive pipeline network that transports a quarter of all the oil produced in Canada and the United States. The $106.49 billion market capitalization company also owns and operates a substantial portfolio of natural gas assets, including transmission, storage, and distribution assets.

The ongoing boom in the oil and gas industry has provided Enbridge stock with a much-needed boost to turn things around after a tough period during the pandemic. The stock is trading for $52.62 per share at writing, boasting a juicy 6.35% dividend yield. Adding its shares to your portfolio could provide you with the benefit of significant dividend payouts and capital gains during the energy sector’s bull run.

Cenovus Energy

Cenovus Energy (TSX:CVE)(NYSE:CVE) is an integrated oil and gas company with a $28.99 billion market capitalization. While not as large as Enbridge, Cenovus Energy is still a massive company in its own right. It is Canada’s third-largest oil and gas producer, and it is the second-largest company in Canada for refining and upgrading operations. The company also boasts a long history of strong and relatively stable cash flows.

Cenovus also boasts commodity diversity through its operations in oil sands, natural gas, and everything in between. The rapidly rising oil prices have provided the company with a significant boost, and that is reflected in its performance on the stock market. At writing, Cenovus Energy stock is trading for $14.38 per share, and it boasts a 0.49% dividend yield. The stock is up by 81.80% year to date, and it could provide you with further upside in the coming months.

Foolish takeaway

The energy sector was in deep trouble since before the onset of COVID-19 and ensuing restrictions that plummeted demand for the underlying commodities. However, this year has shown that the reduced demand and hardships for the oil and gas industry have come to an end. Today, oil and has stocks are some of the top-performing securities in the stock market.

As business keeps booming in the industry, it might be the right time to find and buy stocks in the energy sector that can provide you with stellar shareholder returns. Enbridge stock and Cenovus Energy stock could be ideal assets to consider for this purpose.

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

More on Dividend Stocks

Happy family father of mother and child daughter launch a kite on nature at sunset
Dividend Stocks

Parents: Here’s How to Boost Your Monthly Income

Parents, you have enough to worry about. But if you can put aside even $40 per month, that can create…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Looking for a Reliable Retirement Income? Consider These Dividend-Paying Stocks

Investors looking to establish a reliable retirement income have no shortage of options to choose from. Here's a trio of…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

3 Oversold Dividend Stocks That Could Make You Rich When They Bounce Bank

Don't wait around for these oversold dividend stocks to bounce back, each certainly will, which is why now is the…

Read more »

A small flower grows out of a concrete crack.
Dividend Stocks

Down 8% Last Month, Canadian Tire Stock Is a Deal Heading Into June 2023

May wasn't a good month for the stock, but June has been different from the beginning and may present an…

Read more »

Canadian Dollars
Dividend Stocks

Need Passive Income Right Now? Turn $20,000 Into $152 Every Month

This dividend stock may be down now, but offers substantial passive income through its 9.31% dividend yield as of writing!

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Dividend Stocks

Is Exchange Income Stock a Buy?

Even within an industry, some stocks might be worth considering in certain market conditions, while others may be avoided.

Read more »

Dividend Stocks

2 Top Canadian Value Stocks in June 2023

Canadian Imperial Bank of Commerce (CIBC) stock is a compelling buy in June, and so is this Canadian REIT.

Read more »

Illustration of bull and bear
Dividend Stocks

2 Cyclical Stocks to Buy Before the Next Bull Market

The TSX index has been cyclical in the past 12 months, with neither a bearish nor a bullish trend fully…

Read more »