The S&P/TSX Composite Index was up 15 points in early afternoon trading on Wednesday, August 9. Meanwhile, the S&P/TSX Capped Energy Index was up 1.1% in the same trading session. Today, I want to compare two of the top energy stocks on the TSX; Suncor Energy (TSX: SU) and Enbridge (TSX: ENB). Which is the better buy in the first half of August? Let’s jump in.
Image source: Getty Images
The case for Suncor stock in the summer of 2023
Suncor is one of the largest integrated energy companies in Canada and one of the top oil producers on the planet. This Calgary-based company is known for its oil sands production. Shares of Suncor have jumped 9.2% month over month as of early afternoon trading on August 9. That has pushed this energy stock into positive territory so far in 2023. Investors can see more of its recent performance with the interactive price chart below.
Investors can expect to see this company’s second batch of fiscal 2023 results on August 14. In the first quarter (Q1) of fiscal 2023, the company reported adjusted funds from operations (AFFO) of $3.00 billion or $2.26 per common share — down from $4.09 billion, or $2.86 per common share, in the previous year. Meanwhile, adjusted operating earnings fell to $1.80 billion, or $1.36 per common share, compared to $2.75 billion, or $1.92 per common share, in Q1 fiscal 2022.
Western Canadian Select (WCS) price per barrel stood just above the $60 price point at the time of this writing. Meanwhile, the price of West Texas Intermediate (WTI) crude was trading at US$83 per barrel. That is still down significantly compared to its price in the previous year.
Shares of Suncor currently possess a very favourable price-to-earnings (P/E) ratio of 7.1. Moreover, the energy stock offers a quarterly dividend of $0.52 per share. That represents a very solid 4.9% yield.
Why Enbridge is a powerhouse energy stock you can’t ignore
Enbridge is the largest energy infrastructure company in North America. That means investors cannot ignore this Calgary-based energy behemoth. This energy stock has jumped 2% over the past month at the time of this writing. Its shares are still down 8.1% in the year-to-date period.
This company released its Q2 fiscal 2023 earnings on August 4. Enbridge reported adjusted earnings of $1.4 billion, or $0.68 per common share, which was mostly flat compared to adjusted net income of $1.4 billion, or $0.67 per common share, in Q2 2022. Adjusted EBITDA stands for earnings before interest, taxes, depreciation, and amortization; this metric aims to get a better picture of a company’s profitability.
The energy stock last had a P/E ratio of 26. That puts Enbridge in solid value territory compared to its industry peers. Moreover, the energy stock offers a quarterly dividend of $0.887, which represents a very tasty 7.2% yield. Enbridge has also achieved over 25 straight years of dividend increases, which makes this energy stock a Dividend Aristocrat.
Which energy stock is the better buy today?
Enbridge is a dividend beast that offers solid value at the time of this writing. However, Suncor offers terrific value, an outstanding balance sheet, a rock-solid dividend payout, and the hope for strong earnings growth going forward. Suncor is my top energy stock pick today.
