3 of the Best Canadian Energy Stocks to Buy for All Types of Investors

With the energy sector experiencing significant tailwinds, here are three of the best Canadian stocks to buy now and hold for years.

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Having adequate exposure to the energy sector is always essential. Not only is energy one of the largest sectors of the Canadian economy, but energy is also crucial for the global economy to grow. Plus, because energy is one of the few industries benefitting from the current environment, there’s no question that Canadian energy stocks are some of the best investments to buy now.

There were already many inflationary forces impacting the economy as we began 2022. However, the impact on energy markets due to the Russian invasion of Ukraine is affecting global economies the most.

And yet, as energy supplies are impacted, energy demand continues to grow all the time. Therefore, owning high-quality and long-term energy stocks are some of the best investments to make today.

Several energy stocks have even pulled back from their recent highs, making these stocks even more attractive to buy now.

The industry as a whole, though, while it can be defensive, and energy is essential, there are still plenty of higher-risk and higher-growth stocks to consider.

If you’re looking to increase your energy exposure and buy these Canadian stocks while they offer such significant potential, here are three of the best for every type of investor.

Dividend investors: Here is a resilient, high-yield stock to buy and hold

The majority of energy stocks in Canada are engaged in the exploration and production of oil and gas. However, there are also energy infrastructure stocks, such as Enbridge (TSX:ENB)(NYSE:ENB), which make excellent long-term investments.

Enbridge has a massive portfolio and is crucial to the North American economy. Nearly a third of all the oil produced in North America is transported by Enbridge. Plus, it also transports a fifth of the natural gas used in the United States, owns a utility business, energy storage facilities, and even has a growing green energy segment.

Because the stock and its profitability are impacted much less by the price of oil and gas, Enbridge is a safer, more defensive stock for investors looking to gain exposure to the industry.

In addition, because it’s constantly bringing in tonnes of cash flow, the company is one of the best energy stocks to buy for dividend investors. Today the stock offers a yield of more than 6% and has increased that dividend every year for more than a quarter century.

One of the best Canadian energy stocks to buy for an attractive mix of growth and income

Another stock that pays an attractive dividend but is also slightly more volatile than Enbridge is Freehold Royalties (TSX:FRU).

Therefore, Freehold is a stock for investors that can stomach more risk. Although, similar to Enbridge, it offers a high yield, currently at 7.5%, Freehold will experience more volatility due to its exposure to energy prices.

Freehold doesn’t actually produce any energy itself. Instead, it receives a royalty from other energy companies that use its land for producing oil and gas. However, its revenue is still impacted by the price of commodities.

Despite its higher volatility, though, Freehold is still a great stock to buy and hold for the long haul and one of the best Canadian energy stocks to buy now.

One of the best long-term investments to make

Of course, a lot of the focus lately has been on traditional energy stocks since oil and gas prices skyrocketed in 2022. However, these issues that economies around the globe are facing, caused by a shortage in commodities, could also be helped by more renewable energy.

That’s why some of the best Canadian energy stocks to buy now are renewable energy businesses like Northland Power (TSX:NPI).

Renewable energy has many benefits. One of the only reasons why we don’t use more is that there are few of these assets. But with climate change increasingly becoming a problem that needs to be addressed, green energy stocks are some of the best long-term growth stocks to buy now due to their decades of growth potential.

Plus, a stock like Northland is already benefitting from the current environment, and it has several projects that will come online over the next few years.

Therefore, if you’re looking for the best Canadian energy stocks to buy now, Northland is one to keep your eye on.

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 Daniel Da Costa has positions in ENBRIDGE INC, FREEHOLD ROYALTIES LTD., and NORTHLAND POWER INC. The Motley Fool recommends Enbridge and FREEHOLD ROYALTIES LTD.

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