Are Oil Sands Stocks a Good Buy Today?

Canadians can trust top oil sands stocks like Imperial Oil Ltd. (TSX:IMO), which also offers fantastic value in the early summer season.

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The S&P/TSX Composite Index was up 186 points in early afternoon trading on Wednesday, July 12. Meanwhile, the S&P/TSX Capped Energy Index was up marginally during the same trading session. Bitumen production from oil sands mining hit a record high of 3.5 million barrels per day (MMb/d).

A recent snapshot from the Canadian Energy Regulator projected that bitumen production would grow steadily through 2040. It is projected to reach 4.5 MMb/d by the end of the forecast period.

Today, I want to discuss whether these top Canadian oil sands stocks are worth snatching up as we approach the midway point in July. Let’s jump in.

This oil sands stock looks dirt cheap in the first half of July

Imperial Oil (TSX:IMO) is a Calgary-based company that is engaged in the exploration, production, and sale of crude oil and natural gas in Canada. Shares of this oil sands stock have dropped 1.9% month over month at the time of this writing. Its shares have climbed 2% so far in 2023. Investors can see more of its recent performance with the interactive price chart below.

Investors can expect to see the company’s second-quarter fiscal 2023 earnings later this month. In the first quarter of fiscal 2023, Imperial Oil posted net income of $1.24 billion — up $75 million compared to the previous year. The company posted earnings per share (EPS) of $2.13 compared to $1.75 in the first quarter of fiscal 2022.

Shares of this oil sands stock currently possess a very favourable price-to-earnings (P/E) ratio of 5.4. Moreover, Imperial Oil offers a quarterly dividend of $0.50 per share. That represents a 3.1% yield.

Why you can trust Suncor for decades to come

Suncor Energy (TSX:SU) is another top integrated energy company that is based in Calgary. Shares of this oil sands stock have dipped 1.4% over the past month. The stock has dropped 5.1% in the year-to-date period.

This company released its first-quarter fiscal 2023 earnings on May 8. Suncor reported adjusted funds from operations (AFFO) of $1.8 billion. Meanwhile, total oil sands production reached 675,100 barrels per day (bbls/d) in the first quarter of 2023 — down marginally from 685,700 bbls/d in the first quarter of fiscal 2022. Suncor announced the acquisition of TotalEnergies and the remaining working interest in Fort Hills.

Suncor stock has declined 5.1% so far in 2023. Shares of this oil sands stock currently possess an attractive P/E ratio of 6.5. Meanwhile, Suncor offers a quarterly dividend of $0.52 per share, which represents a strong 5.3% yield.

One more oil sands stock I’d snatch up right now

Canadian Natural Resources (TSX:CNQ) is another Calgary-based company that acquires, explores for, develops, products, markets, and sells crude oil, natural gas, and natural gas liquids (NGLs). Its shares have climbed 3.2% month over month as of early afternoon trading on July 12. The stock is up 6.4% so far in 2023.

In the first quarter of 2023, Canadian Natural Resources reported adjusted net earnings of $1.88 billion, or $1.69 per diluted share — down from $2.19 billion or $1.96 per diluted share in the first quarter of fiscal 2022. The company achieved record natural gas production and liquids production in the quarter.

Shares of this oil sands stock possess a favourable P/E ratio of 8.9 at the time of this writing. Moreover, Canadian Natural Resources offers a quarterly distribution of $0.90 per share, representing a solid 4.7% yield.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy.

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