2 Energy Companies to Hold for Decades

Despite the relative volatility in the sector and the changes it’s expected to go through in the next few decades, there are some energy companies you can hold long term.

| More on:
canadian energy stocks can be good investments

The energy sector is going through a transformative phase right now. The push for renewables and the advent of EVs together are expected to divert the two most important uses of fossil fuels in the world. And even though a saturation point is decades away, a few technological breakthroughs can fast-track the slow “decline” of traditional energy sources.

Keep in mind that the demand for oil and gas might not go away completely even by the end of the century. And even then, with the right approach and technologies, fossil fuels may find a way to coexist with green energy sources and renewables.

But even if that doesn’t happen, there are some energy stocks that are either positioned the right way or have proven their mettle during past difficult phases that can survive and remain profitable for decades.

And there are two that stand out among the others.

A natural gas-focused pipeline company

TC Energy (TSX:TRP)(NYSE:TRP) is a pipeline/midstream energy giant from Canada with an impressive asset base in the United States. The company has three main business segments: natural gas, liquids, and electricity. And it’s the natural gas segment that endorses the long-term potential of this energy giant.

The company controls a massive +93,000-kilometre network of natural gas pipelines in North America. It also has the largest storage capacity (about 653 cubic feet). And thanks to these assets, the company helps meet one-fourth of the natural gas demand of the continent.

Its liquids pipeline network is quite impressive as well but nowhere near on bar with the natural gas one. As for electricity, the company has a production capacity of about 4.3 GW — enough to power four million homes. And three-quarters of the power comes from emission-free sources.

The natural gas focus, which has a better chance of surviving in the greener future, is not the only reason TC is an ideal long-term energy investment. Its history is also a potent endorsement, especially its resilience after the 2015 crash.

An energy producer

If you lean more towards upstream energy companies, Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) might be the right fit for you. It’s one of the largest energy producers in North America, focusing primarily on Western Canada. And while its oil production capacity is not very far from its natural gas one, the latter is relatively higher.

Its diverse portfolio of production resources and strong financials make it an interesting energy investment. It has also proven its worth as a resilient energy company in the 2015 crash, though the 2020 crash was quite hard, and the subsequent recovery has been insanely powerful. Yet the stock boasts a decent 3.9% yield and an undervaluation which is an unusual match to its current bullish phase.

Foolish takeaway

The energy bull market might be coming to an end, which means a correction is just on the horizon. That would be the perfect time to buy these two energy giants and hold on to them for decades. You will get the best of the dividends they offer as well as any long-term capital-appreciation potential these stocks might have.

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 recommends CDN NATURAL RES.

More on Energy Stocks

Value for money
Energy Stocks

Energize Your Portfolio With 2 Value Stocks

Two energy stocks are great value buys if you’re looking to energize your portfolio with high dividend or enormous capital…

Read more »

oil and gas pipeline
Energy Stocks

What Energy Stocks Are the Best to Buy and Hold for Years?

Not all energy stocks are worth owning, but these two energy stocks are some of the best to buy and…

Read more »

oil and natural gas
Energy Stocks

Suncor Energy (TSX:SU) Stock: Still a Great Value

Suncor Energy (TSX:SU)(NYSE:SU) is looking like an incredible value today.

Read more »

Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Energy Stocks

Market Correction: 3 Value Stocks to Buy

The TSX fell 10% from March 2022 highs this week, leading to a technical correction in the market, which leaves…

Read more »

oil and natural gas
Energy Stocks

2 Canadian Energy Stocks That Pay Massive Dividends

Canadian energy stocks are gushing cash today. Here's two that are paying massive dividends to faithful shareholders right now.

Read more »

energy industry
Energy Stocks

Time to Buy Vermilion Energy Stock?

Vermilion Energy is on the mend. Is VET stock still a buy after the big rally?

Read more »

Oil pumps against sunset
Energy Stocks

3 Top TSX Energy Dividend Stocks to Buy Right Now

Energy investors have been in a sweet spot lately with rallying stocks and steep dividend raises.

Read more »