The energy sector is one of the most volatile industries in Canada, as many factors, including supply and demand, geopolitical events, and environmental regulations, can affect the profitability of energy companies. However, despite some uncertainties, many Canadian energy stocks have excellent track records of posting incredible financial growth and rewarding long-term investors with increasing dividends. This is one of the key reasons why investors who are looking for reliable and stable returns in the long run can consider adding some quality energy stocks to their portfolios.
In this article, I’ll highlight two such energy stocks on the TSX that have strong growth prospects, attractive dividends, and solid financial positions. You can buy these stocks today with an investment of as low as $1,000 and hold them forever.
Enbridge stock
Enbridge (TSX:ENB) could arguably be the most reliable energy stock in Canada, with strong financials and a decades-long track record of delivering consistent dividend growth. The Calgary-headquartered company currently has a market cap of $98.8 billion as its stock trades at $46.46 per share after witnessing a minor 2% decline so far in 2024. At this market price, ENB has a very attractive annualized dividend yield of 7.9%, making it even more appealing for income investors.
Even as growing geopolitical tensions and macroeconomic prices have made oil and gas prices volatile in the last year, Enbridge’s strong energy infrastructure business continued to deliver stable earnings. Last year, the company’s total revenue slipped nearly 18% YoY (year over year) to $43.6 billion. Positive contributions from the recent Tres Palacios acquisition and strong operational performance helped limit the decline in its adjusted annual earnings to less than 1% YoY to $2.79 per share.
Notably, Enbridge exceeded its 2023 EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance, marking 18 years of meeting its annual projections. Despite challenges like lower Mainline tolls and higher costs, Enbridge has also reaffirmed its 2024 financial guidance, expecting growth from recent acquisitions and new assets. Moreover, its predictable cash flows and strong long-term fundamental outlook make this energy stock really attractive to hold for years to come.
TC Energy stock
TC Energy (TSX:TRP) is the second top Canadian energy stock you can consider buying in 2024. Besides liquid pipelines, its diversified energy infrastructure business includes natural gas pipelines in the United States, Canada, and Mexico. TRP currently has a market cap of $55.3 billion as its stock trades at $53.32 per share with about 4% year-to-date gains. It has an impressive 7.2% annualized dividend yield at the current market price.
In 2023, TC Energy’s total revenue rose 6.4% YoY to a record $50.9 billion. More importantly, its adjusted EBITDA for the year jumped 11% YoY to $11 billion with the help of strong execution. As a result, the company’s adjusted annual earnings also advanced by 5.1% from a year ago to $4.52 per share. Going forward in 2024, the energy infrastructure firm aims to maximize asset value and enhance its balance sheet.
Last year, TC Energy also achieved mechanical completion on the Coastal GasLink project, which is likely to accelerate its financial growth trends in the years to come. These positive factors make TRP stock attractive to buy now and hold forever.
