The prices of energy products, including crude oil and natural gas, have been on a downward trajectory for quite some time now after touching their multi-year highs in 2022. As the global economy started reopening in the post-pandemic era, the demand for oil and gas suddenly recovered, driving a spectacular rally in their prices last year. But the Russian invasion of Ukraine, slowing global economic growth, and the possibility of a moderate recession in the near term have hammered the oil and gas prices in 2023, also leading to sharp declines in the shares of energy companies.
Nonetheless, the long-term outlook for energy products remains strong as the global demand is expected to surge in the coming years, especially from emerging markets. Given that, these recent declines could be a great opportunity for long-term investors to add some quality in Canadian energy stocks to their portfolios to expect outstanding returns. Let’s take a look at two of the best energy stocks in Canada you can buy on the dip in 2023 to hold for the years to come.
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Suncor Energy stock
If you’re looking to add some fundamentally strong Canadian energy stocks to your portfolio at a bargain in 2023, you may want to consider Suncor Energy (TSX: SU). After delivering solid 101% positive returns in the previous two years combined, the shares of this Calgary-headquartered integrated energy firm have seen 11.5% value erosion this year so far to currently trade at $38.03 per share with $49.8 billion in market cap.
To give you an idea about the recent growth trend in its financials, Suncor has managed to grow its revenue 82% in the five years between 2017 and 2022 to $58.5 billion. Its adjusted annual earnings during the same five-year period climbed 334% to $8.34 per share.
Furthermore, Suncor’s disciplined capital-allocation approach underpins the strength of its balance sheet. Besides these positive factors, SU stock offers a decent 5.4% annualized dividend yield at the current market price that can help investors earn passive income.
Crescent Point Energy stock
Crescent Point Energy (TSX:CPG) could be another great Canadian energy stock to consider amid the ongoing temporary declines in the prices of energy products. After rallying by 226% in the last couple of years combined, CPG stock has lost nearly 11% of its value in 2023 so far to currently trade at $8.56 per share. The stock currently has a market cap of $4.6 billion and an annual dividend yield of 4.5%.
In recent years, Crescent Point Energy has increased its production with the help of new acquisitions as global demand continues to grow amid supply concerns. Higher production and favourable pricing for energy products drove the company’s 2022 revenue up by 64% year over year to $4 billion. Similarly, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the year grew positively by 62% from a year ago to $2.5 billion with a solid adjusted EBITDA margin of 62.7%.
With its exploration work in full swing and consistent focus on new quality acquisitions, Crescent Point’s production levels may see further improvements in the coming years and help this dividend-paying Canadian energy stock soar.
