3 Energy Stocks to Buy as Oil Soars

Oil prices are up as political tensions, which should spur investors to buy energy stocks like Suncor Energy Inc. (TSX:SU)(NYSE:SU).

| More on:
oil and gas pipeline

Image source: Getty Images

Oil and gas prices have been on a tear since the beginning of 2021. In late 2021, I’d suggested that investors scoop up some of Canada’s top energy stocks, as the sector looked poised to keep this momentum going.

Yesterday, Russian president Vladimir Putin moved to officially acknowledge two separatist entities in eastern Ukraine. Recent reports suggest that he followed that with orders for Russian troops to bolster the positions of the separatists in the Donbass region. This has hurt potential peace talks and sent oil and gas prices soaring. Today, I want to look at three energy stocks that are worth snatching up in this environment.

This energy stock has soared over 110% from the previous year

Cenovus Energy (TSX:CVE)(NYSE:CVE) is a Calgary-based company that is engaged in the development, production, and marketing of crude oil, natural gas liquids, and natural gas in North America and the Asia Pacific region. Shares of this energy stock have climbed 21% in 2022 as of late-morning trading on February 22. The stock is up nearly 120% in the year-over-year period.

The company unveiled its fourth-quarter and full-year 2021 results on February 8. Cash from operating activities soared 774% year over year to $2.18 billion in the fourth quarter. Meanwhile, adjusted funds flow jumped 485% to $1.94 billion. Total revenues soared to $46.4 billion compared to revenues of $13.5 billion in 2020.

Shares of this energy stock are trading in favourable value territory compared to its industry peers. It offers a quarterly dividend of $0.035 per share. That represents a modest 0.7% yield.

Here’s another oil and gas beast to target today

Imperial Oil (TSX:IMO)(NYSE:IMO) is another Calgary-based company that explores for, produces, and sells crude oil and natural gas in Canada. This energy stock has jumped 18% so far this year. It shares are up 95% year over year.

Investors got to see Imperial Oil’s final batch of 2021 earnings on February 1, 2022. In Q4 2021, net income enjoyed a $1.95 billion year-over-year swing to $813 million over a $1.14 billion loss in the fourth quarter of 2020. For the full year, net income reached $2.47 billion over a $1.85 billion loss in the prior year. Imperial Oil achieved its highest annual production in over half a century.

This energy stock is also trading in solid value territory over its top competitors. It hiked its quarterly dividend by 26% to $0.34 per share. That represents a 2.4% yield.

Why Suncor is still my favourite energy stock to buy now

Suncor Energy (TSX:SU)(NYSE:SU) is the third energy stock I’d look to scoop up, as geopolitical tensions reach a boiling point. It is one of the top integrated energy companies in Canada. Shares of Suncor are up 11% in 2022. Meanwhile, the stock has climbed 42% in the year-over-year period.

In Q4 2021, Suncor posted adjusted funds from operations of $3.14 billion, or $2.17 per common share — up from $1.22 billion, or $0.80 per common share, in the previous year. Shares of Suncor still possess a favourable P/E ratio of 23 at the time of this writing. It offers a quarterly dividend of $0.42 per share, which represents a solid 4.5% 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. The Motley Fool has no position in any of the stocks mentioned.

More on Energy Stocks

oil and natural gas
Energy Stocks

Oil Stocks: The Next 3 Months Are Key

Oil stocks like Suncor Energy Inc (TSX:SU)(NYSE:SU) are reporting earnings soon. There are two other big events happening, too.

Read more »

Oil pumps against sunset
Energy Stocks

Want Monthly Passive Income? These TSX Dividend Stocks Are for You

Create a passive income stream with monthly paying dividend stocks on the TSX such as Pembina Pipeline and Freehold Royalties.

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

Why Suncor Energy Stock Could Lose its Underperformer Tag Soon

So far this year, SU stock has gained 21%, while TSX energy stocks at large have gained 38%.

Read more »

money cash dividends
Dividend Stocks

Canadian Investors: Where to Put $100 Right Now

Canadians with $100 to invest can put their money to work in three low-priced, dividend-paying TSX stocks.

Read more »

Dice engraved with the words buy and sell
Dividend Stocks

Not Every Cheap Stock has Value: 1 Stock to Buy, 1 to Sell, and 1 to Hold

The market downturn has created an opportunity to buy value stocks at a bargain. Here’s a guide to optimizing your…

Read more »

Upwards momentum
Energy Stocks

Gold and Energy: Here Are Two of the Best Stocks to Buy Now

Gold and energy stocks are some of the best to buy now for very different reasons.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Here’s Why I’m Buying the Dip in Suncor (TSX:SU) Today

Suncor Energy Inc. (TSX:SU)(NYSE:SU) stock is worth buying, even as oil and gas prices have softened in the second half…

Read more »

Senior couple at the lake having a picnic
Energy Stocks

TFSA: How to Maximize Your Contributions to Retire Rich

The RRSP isn’t the only account that can be used for retirement savings. Here’s how you can use a TFSA…

Read more »