After trading on a subdued note for several months, crude oil prices have shown early signs of a bounce-back in 2024, as escalating geopolitical tensions, especially in the Middle East, are fueling supply concerns. Stronger prices could help energy companies improve their profitability, which could lead to a rally in energy stocks. Considering that, it could be the right time for investors to add shares of some fundamentally strong oil and gas companies to their portfolios.
In this article, I’ll highlight two of the best Canadian energy stocks I find really attractive to buy in February 2024 and hold for the long run.
International Petroleum stock
If you’re looking to buy a quality energy stock at a bargain, International Petroleum (TSX:IPCO) could be worth considering right now. This Vancouver-headquartered oil and gas firm has a strong portfolio of diversified assets located in countries like Canada, Malaysia, and France. After skyrocketing by 461% in the previous three years, IPCO stock currently trades with 9.1% year-to-date losses at $14.33 per share with a market cap of $1.8 billion.
Earlier this week, on February 6, International Petroleum announced its 2023 financial results. During the year, the company achieved record net production of an average net production of 51,100 boepd (barrels of oil equivalent per day) with operating costs of US$17.6 per barrels of oil equivalent.
Based on its 2024-2028 business plan outlook, the company aims to achieve an average net production of 55,000 boepd. In its latest earnings report, International Petroleum also highlighted the progress of the Blackrod Phase One project in Canada by confirming its development schedule and budget, which could play a crucial role in accelerating its financial growth trends in the long run.
Given these positive factors and its consistent focus on returning value to shareholders through share buybacks, the recent decline in IPCO stock could be an opportunity for long-term investors to buy it at a bargain.
Canadian Natural Resources stock
Another top Canadian energy stock I find attractive to buy in February is Canadian Natural Resources (TSX:CNQ). This Calgary-headquartered company is among the world’s largest independent crude oil and natural gas producers, with a well-diversified portfolio of assets mainly in North America.
It currently has a market cap of $ 88.3 billion as the stock trades at $81.53 per share after sliding by nearly 6% in 2024 so far. This year’s correction in CNQ stock comes after it more than doubled in value in the previous three years. At the current market price, the stock also offers an attractive 4.9% annualized dividend yield and distributes these payouts every quarter.
While Canadian Natural hasn’t yet announced its fourth-quarter results, its average quarterly production volumes in the third quarter reached a record of about 1.39 million boepd. Strong volumes for both liquids and natural gas contributed to its record quarterly production last quarter.
Moreover, Canadian Natural’s low-risk assets, robust balance sheet, and decades-long track record of operational excellence make it a solid investment option in the Canadian energy sector to buy now and hold for the long term.
