Oil prices have finally fallen below the US$90-per-barrel mark — going this low for the first time since February 2022. However, President Biden might not be done yet. The U.S. president’s administration is committed to decreasing oil prices further. The administration is pressuring U.S. oil producers to ramp up production, placing similar pressure on OPEC (The Organization of Petroleum Exporting Countries).
Biden also ordered the release of 180 million oil barrels from the U.S. Strategic Petroleum Reserve in a monumental effort to drive oil prices down. Decreasing oil prices can have a significant impact on commodity stocks. Canada has significant oil-production operations, and the TSX boasts several energy stocks that could feel the impact of lower oil prices.
Canadian investors that are bullish on the energy sector might want to re-evaluate their investments in the energy industry. Today, we will take a look at two TSX energy stocks well positioned to remain resilient, even as oil prices plunge to lower levels.
Enbridge (TSX:ENB)(NYSE:ENB) is a $112.60 billion market capitalization energy infrastructure company. Headquartered in Calgary, Enbridge stock boasts an extensive pipeline network responsible for transporting a large portion of all the traditional energy products consumed in North America.
As of this writing, Enbridge stock trades for $55.61 per share and boasts a juicy 6.19% dividend yield. The Canadian energy giant is down by 6.83% from its 52-week high, outperforming the broader energy industry. Its depressed share prices have inflated its dividend yield to attractive levels.
Growing demand for oil and gas and a limited pipeline capacity mean Enbridge stock should continue delivering a solid performance despite oil price declines.
Enbridge stock is also a Canadian Dividend Aristocrat with a 26-year dividend-growth streak at a compound annual growth rate of 10%. It could be an attractive asset to consider adding to your portfolio at current levels.
Tourmaline Oil (TSX:TOU) is a $24.47 billion market capitalization Canadian energy company headquartered in Calgary. The company is engaged in the exploration, development, and extraction of crude oil and natural gas in Canada, primarily focusing on natural gas production.
As of this writing, Tourmaline Oil stock trades for $72.64 per share and boasts a 1.24% dividend yield. It is down by 9.95% from its 52-week high, and it is performing better than most energy sector stocks on the TSX. Despite its name suggesting otherwise, 90% of the company’s production comprises natural gas, positioning it well to capitalize on growing global natural gas demand.
Tourmaline has several agreements in place to provide natural gas to the U.S. market, generating record cash flows. The company reported an uptick of 137% in its operating cash flow in the previous quarter on a year-over-year basis.
The company has delivered several special dividends and dividend hikes in the last two years. Its 12-month dividends paid amount to $6.28 per share, equating to a roughly 9% trailing dividend yield. It could be another attractive addition to your investment portfolio at current levels.
As of this writing, the S&P/TSX Capped Energy Index is down by 25.08% from its June 8, 2022, level, reflecting the rapid decline in energy stocks across the industry. Canadian energy stocks could see further declines if oil prices keep decreasing in the coming weeks.
Energy industry stocks focusing on energy infrastructure or natural gas might outperform the broader energy sector, despite the decline. If you want to remain invested in the Canadian energy sector, Enbridge stock and Tourmaline Oil stock could be solid bets for you to consider for your self-directed portfolio.