3 Energy Stocks to Buy Hand Over Fist in January

With 2024 starting on a positive momentum for stock market investing, these three TSX energy stocks are excellent buys right now.

| More on:
A worker overlooks an oil refinery plant.

Source: Getty Images

After a tough year for the most part in 2023, the broader Canadian market saw a surge in the last couple of months. Between October 27, 2023, and December 27, 2023, the S&P/TSX Composite Index climbed 12.16%. As of this writing, the Canadian benchmark index has gone on a slight dip, falling by 0.94% within the first few days of trading in 2024.

While that reflects a slight pullback in equity securities across most sectors, the Canadian energy industry seems to be picking pace. Some of the top Canadian energy stocks, previously on sale, have seen an uptick. In light of the positive momentum, here are three top picks that I would buy in January before they soar too high.

Suncor Energy

Suncor Energy (TSX:SU) saw a jump in its share prices as the company reported its fourth-quarter earnings report. One of the most significant announcements was its oil output being at its second-highest level ever. The Calgary-based $59.24 billion market capitalization integrated energy company reported that its upstream production in the fourth quarter (Q4) of fiscal 2023 jumped to 808,000 barrels per day.

Suncor Energy’s new chief executive officer came in with the goal of making significant improvements by cutting costs and exiting non-core businesses to prioritize the core production, refining, and retail operations.

As of this writing, Suncor Energy stock trades at $45.34 per share, up by 5.71% from its January 2, 2024 level. At current levels, it pays its shareholders their dividends at a juicy 4.81% dividend yield.

Enbridge

Enbridge (TSX:ENB) shares also rallied to outperform the broader market, gaining 2.12% between December 29, 2023, and January 3, 2024. The Calgary-based $104.21 billion market capitalization multinational pipeline and energy company owns and operates pipelines throughout the U.S. and Canada.

It is responsible for transporting a lot of the crude oil, natural gas, and natural gas liquids produced and used in the region.

The business performed well in 2023, with its management anticipating its $25 billion capital program and acquisitions to drive growth in its revenue and distributable cash flow. After another year of increasing dividends, Enbridge stock now has a 29-year dividend-growth streak.

As of this writing, the Canadian Dividend Aristocrat trades for $48.71 per share and pays its investors their quarterly payouts a juicy 7.51% dividend yield.

TC Energy

TC Energy (TSX:TRP) traded for as high as $74 per share in June of 2022. The stock then took a prolonged downturn, sliding down to as low as $45 per share in October 2023. When the broader market began rallying, TC Energy shares also saw an uptick. Between October 4, 2023, and December 27, 2023, TRP stock gained 18.04%. As of this writing, TRP stock trades at $52.79 per share.

The rally in its share prices coincided with the rebound in the bond market due to anticipated rate cuts in the U.S. and Canada this year. High inflation forced central banks in both countries to enact a series of aggressive interest rate hikes in the last year and a half.

Leading into 2024, the rate hikes paused. If rate cuts take place this year, it can indeed be a massive boost to profits for TC Energy because it relies on a huge debt load to fund large capital programs. Along with the completion of its Coastal GasLink project, things are looking up for the Canadian pipeline giant.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if TC Energy made the list!

Foolish takeaway

After a drop in share prices for energy stocks that were arguably overdone, these three major industry players are picking up pace again. While there is no telling whether further market volatility will lead to more pullbacks in the near term, analysts expect a surge in value stocks in 2024.

If analyst anticipation is correct, we might be seeing the start of the uptick. To this end, these TSX energy stocks might make good holdings to add to your self-directed portfolio in January 2024.

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 Energy Stocks

Start line on the highway
Dividend Stocks

TFSA Passive Income: 4 Stocks to Buy and Never Sell

Looking for stocks that create perfect passive income? This TFSA dream team is the perfect portfolio just waiting to happen.

Read more »

A worker uses a double monitor computer screen in an office.
Energy Stocks

Best Stock to Buy Right Now: Canadian Natural Resources vs Suncor?

When choosing between two energy stocks, it’s a good idea to understand and compare their business models, and not just…

Read more »

A lake in the shape of a solar, wind and energy storage system in the middle of a lush forest as a metaphor for the concept of clean and organic renewable energy.
Energy Stocks

Is Northland Power Stock a Buy for its 5.6% Dividend Yield?

Northland Power stock offers a nice monthly dividend with upside potential for when its construction projects come online through 2027.

Read more »

A child pretends to blast off into space.
Energy Stocks

Is TC Energy Stock a Good Buy?

Here are some key reasons why TC Energy stock looks even more attractive to buy after its recent South Bow…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

3 Must-Buy Energy Stocks for Canadians in October

Top Canadian energy stocks are heating up this October. Secure your share of the potential gains now.

Read more »

nuclear power plant
Energy Stocks

1 Trending Growth Stock Down 8% to Buy and Hold for the Long Haul

This top mover has risen about 40% in the last month but is still down from its all-time high.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

How to Use Your TFSA to Earn $955/Year in Tax-Free Income

This trending stock can help you earn passive income without lifting a finger.

Read more »

oil and gas pipeline
Energy Stocks

Is Pembina Pipeline Stock a Buy for its 4.7% Dividend Yield?

Besides its consistently growing dividend payouts, these growth initiatives make Pembina Pipeline stock even more attractive to buy now and…

Read more »