2 Top Canadian Energy Stocks to Buy Right Now

Blue-chip TSX stocks like these two Canadian energy sector giants can help you generate substantial long-term wealth growth.

| More on:
Group of industrial workers in a refinery - oil processing equipment and machinery

Image source: Getty Images

Buying and holding high-quality, blue-chip stocks is an excellent strategy for Canadian investors to generate long-term wealth growth. Companies with high market capitalizations, strong fundamentals, a wide economic moat, and the ability to generate substantial cash flows are typically excellent investments.

Several blue-chip stocks also pay investors juicy dividend yields. While they might not deliver rapid capital gains as many growth stocks, these top-notch stocks offer more stability and reliability. You can find such stocks across multiple segments of the Canadian economy, and the energy sector boasts some of the biggest names you can consider as blue-chip stocks to invest in.

Today, we will take a closer look at two Canadian energy stocks trading at favourable rates and boasting high-yielding dividends.

Suncor Energy

Suncor Energy (TSX:SU) is a $51.43 billion market capitalization integrated energy company. Headquartered in Calgary, Suncor stock specializes in producing synthetic crude oil through its oil sands operations. Higher oil prices favour oil producers like Suncor, allowing it to sell crude oil at higher prices to enjoy windfall gains.

After delivering two whole years of positive returns, its shares have declined this year. As of this writing, Suncor Energy stock trades for $39.35 per share, down by 4.68% year to date. At current levels, it boasts a juicy 5.29% dividend yield.

Despite the recent downturn, it might not be a bad investment to consider. Its revenue has grown by 82% in the five years between 2017 and 2022, with its adjusted annual earnings increasing over threefold in that time.

Boasting a strong balance sheet and wide economic moat, this dividend-paying stock can be a solid way to gain exposure to the energy industry.


Enbridge (TSX:ENB) is another major player in the Canadian energy industry to consider adding to your portfolio. Boasting a $101.39 billion market capitalization, Enbridge is a Calgary-based multinational pipeline and energy company.

Enbridge effectively serves other energy companies, providing them with the necessary infrastructure to transport energy products in North America. Boasting an extensive pipeline network and energy storage assets in the region, it plays a significant role in its economy.

Since its income is based on the volume it transports, not commodity prices, it can generate more stable revenue than several other energy companies. Backed by long-term contracts in a regulated industry, its commodity price immunity makes it a lower-risk business. As it increases investments in renewable energy assets, Enbridge is also repositioning itself for a greener future.

As of this writing, Enbridge stock trades for $50.18 per share, boasting a juicy 7.07% dividend yield.

Foolish takeaway

With oil and gas extraction contributing 7.6% towards Canada’s 2022 gross domestic product (GDP), the traditional energy sector still has a lot to give to investors. There is the risk of a downturn if the Bank of Canada raises interest rates on June 7. However, there is more upside potential on account of OPEC countries reducing output in May, increasing the demand for Canadian energy products.

Enbridge stock and Suncor stock are among the biggest plays in the Canadian energy sector. While not without risks, these two TSX energy giants can be excellent investments to consider at current levels.

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 Enbridge. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Canadian Dollars
Dividend Stocks

The Best TSX Stocks to Invest $5,000 in October 2023

The bearish market momentum of October 2023 has created a ripe time to buy three TSX stocks that can outperform…

Read more »

Increasing yield
Dividend Stocks

2 TSX Dividend Stocks With Lucrative Yields in October 2023

These stocks pay great dividends that should continue to grow.

Read more »

Gold medal
Dividend Stocks

Canadian Blue-Chip Stocks: The Best of the Best for October 2023

These TSX giants deserve to be on your radar.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Earn $50 a Week With These 3 Stocks

The right dividend stocks offer more than just a high yield. They offer sustainability and growth, so you can rely…

Read more »

oil and gas pipeline
Dividend Stocks

Where Will Enbridge Stock Be in 10 Years?

I wouldn’t be surprised if ENB stock even doubles in value in the next 10 years. Here why.

Read more »

protect, safe, trust
Dividend Stocks

3 Growth Stocks Safe Enough to Hold for a Decade (or More)

Safe growth stocks that can be held for a decade (or more) may offer steady, predictable returns, making them reliable…

Read more »

sale discount best price
Dividend Stocks

These 2 Discounted Stocks Are Ready for a Comeback

Partial recoveries are quite common, but true comebacks (full recovery) are relatively rare, which makes identifying them harder than identifying…

Read more »

Woman has an idea
Dividend Stocks

Where to Invest $10,000 in October 2023

Its crucial to diversify your investments and reduce portfolio risk while investing amid a challenging macro economic backdrop.

Read more »