The Best Stocks to Buy Now

The best socks to buy right now include AltaGas stock, Cenovus stock. and Peyto stock. All are rising off the soaring natural gas price.

| More on:
Gold medal

Image source: Getty Images.

The natural gas price is soaring. In fact, it’s up 85% in the last year. As a result, we have seen our energy needs become more expensive. We’ve also seen is soaring natural gas stock prices. The oil and gas market is in a state. Low supply combined with rising demand has brought about the perfect storm. It’s made certain natural gas stocks, such as AltaGas (TSX:ALA), the best stocks to buy now.

AltaGas stock: A natural gas stock plus so much more

AltaGas stock is up 33% this year. A number of factors are driving this. The first is AltaGas’s booming propane export business. The second is AltaGas’s solid utility business. Put together, these businesses form a strong and growing entity.

Altagas stock

The company’s midstream business is located in Western Canada. It includes natural gas processing and export facilities. These assets are located in some of the fastest-growing markets in North America, including the Montney and Marcellus/Utica basins. Propane is a by-product of domestic natural gas processing. AltaGas is selling this by-product to places like Asia, where it’s in high demand. In fact, propane prices are up well over 100% in 2021 as a reflection of this positive supply/demand situation.

With a dividend yield of 4%, rapidly falling debt levels, and steadily rising EBITDA, AltaGas stock is clearly one of the best stocks to buy right now. 

Cenovus Energy stock: The best stock to buy right now for its diversification and synergies

Cenovus Energy (TSX:CVE)(NYSE:CVE) has also risen big time in 2021. In fact, it’s up more than 100%.

Cenovus Energy stock best stock to buy right now

It’s the third-largest Canadian oil and gas producer. It’s also the second-largest Canadian-based refiner and upgrader. Cenovus’s most recent quarterly results were positive on all fronts. Cash flows continued to soar. Also, synergies from the Husky acquisition came through. And finally, Cenovus ramped up shareholder returns. The details are clear: cash flow from operations increased almost 200%. More importantly, adjusted funds flow increased 475%. And Cenovus’s dividend doubled. The energy cycle appears to just be beginning as oil and gas prices continue their ascent.

Peyto stock: The best stock to buy right now for its soaring cash flows

As a company where natural gas makes up the vast majority of its production, Peyto Exploration and Development (TSX:PEY) has had it good in 2021. With the rise in the natural gas price, Peyto’s stock price has soared 285% so far this year — with no signs of stopping.

natural gas price Peyto stock

This is because, in fact, the natural gas price has come back with a vengeance. There’s growing global recognition that it will be the fuel that will help with the energy transition. And there’s simply no better place to get higher-quality, low-cost, and cleaner natural gas than Canada.

Peyto Exploration & Development is one of Canada’s lowest-cost natural gas producers. It operates in a very prolific resource basin that’s characterized by predictable production profiles, low-risk exploration, and a long reserve life. This translates into a very strong and lucrative cash flow-generation profile. It is for these reasons that Peyto stock is one of the best stocks to buy right now.

Motley Fool: The bottom line

With the natural gas price rising as fast and as strong as it is, energy stocks are making a real comeback. The best stocks to buy right now have exposure to the soaring natural gas price. They’re also well run with a bright future.

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 Karen Thomas owns shares of Altagas, and Peyto. The Motley Fool recommends ALTAGAS LTD.

More on Energy Stocks

Arrowings ascending on a chalkboard
Energy Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Canadian Natural Resources stock is well set up to beat the TSX as it continues to generate strong cash flows…

Read more »

energy industry
Energy Stocks

2 TSX Energy Stocks to Buy Hand Over Fist Now

These two rallying TSX energy stocks can continue delivering robust returns to investors in the long term.

Read more »

green energy
Energy Stocks

1 Magnificent TSX Dividend Stock Down 37% to Buy and Hold Forever

This dividend stock has fallen significantly from poor results, but zoom in and there are some major improvements happening.

Read more »

oil tank at night
Energy Stocks

3 Energy Stocks Already Worth Your While

Here's why blue-chip TSX energy stocks such as Enbridge should be part of your equity portfolio in 2024.

Read more »

Solar panels and windmills
Energy Stocks

1 Beaten-Down Stock That Could Be the Best Bet in the TSX

This renewable energy stock could be one of the best buys you make this year, as the company starts to…

Read more »

Dice engraved with the words buy and sell
Energy Stocks

Is Enbridge Stock a Buy, Sell, or Hold?

Here's why Enbridge (TSX:ENB) remains a top dividend stock long-term investors may want to consider, despite current risks.

Read more »

Gas pipelines
Energy Stocks

If You Had Invested $5,000 in Enbridge Stock in 2018, This Is How Much You Would Have Today

Enbridge's high dividend yield hasn't made up for its dismal total returns.

Read more »

Bad apple with good apples
Energy Stocks

Avoid at All Costs: This Stock Is Portfolio Poison

A mid-cap stock commits to return more to shareholders, but some investors remember the suspension of dividends a few years…

Read more »