The Future of Canadian Energy Stocks: Where to Invest Now

Energy stocks are changing, with more investment than ever going into renewable energy stocks. These are some of the ones to consider.

The future of Canadian energy stocks is bright, though perhaps far different than what investors have been used to over the last 100 years. The world is shifting to renewable power, creating an opportunity for those looking to invest in stocks today.

That’s especially true of Canadian stocks, as the government continues to support growth in the renewable energy sector. There have been a number of tax breaks and regulatory changes to support this shift, which should stimulate investment and create jobs.

What does this mean for investors? Follow the money! And when you do, consider these energy stocks.

Innergex

Innergex Renewable Energy (TSX: INE) is a leading Canadian renewable energy company with a diversified portfolio of assets. The company owns and operates hydroelectric, wind, solar, and thermal power projects in Canada, the United States, and Europe.

Innergex stock has a strong track record of growth, with the company’s revenue driven by its expanding portfolio of assets and its focus on new market opportunities. It looks like a steal right now, with the stock trading down 33% at just 2.93 times sales.

Shares peaked for the stock back in 2021 with renewed interest in investing in renewable energy stocks that came with President Biden. Yet since then, shares have retreated as interest waned. That leaves more of an opportunity for investors, especially if they’re looking for higher returns.

The stock now offers a dividend yield that’s higher than its five-year average, currently at 5.69% as of writing. This may last for a little while, as the stock continues to try and beat estimates from earnings. Innergex stock has missed estimates in the last few quarters, with interest rates and inflation causing the stock to lag.

Overall, however, those wanting a long-term energy stock with high dividends should definitely consider Innergex stock among energy stocks, along with this other top energy stock.

Boralex

Another top energy stock in the renewable sector is Boralex (TSX: BLX), a leading Canadian renewable energy company with a diversified portfolio of assets. The company owns and operates hydroelectric, wind, solar, and thermal power projects in Canada, the United States, and France.

While Boralex stock does seem to fall in the same category as Innergex stock in terms of shares dropping, it’s done better over time. Boralex stock is down 24% in the last year but up 228% in the last decade as of writing. It, too, has missed earnings estimates but seems to be getting closer to estimates, as revenue increases, inflation eases, and rate hikes perhaps come to a stop.

The stock remains a buy recommendation from analysts, with a potential upside of 31% to reach consensus price estimates, as of writing. Add to this that investors also receive a dividend yield of 1.86% as of writing. The diversified energy stock is, therefore, a great option for those seeking returns as shares bounce back in a pre-inflation environment, as well as gaining dividends in the meantime on the TSX today.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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