With only a few weeks left in the year, investors are eyeing top energy stocks to lock in potential gains. Among the TSX-listed players, Canadian Natural Resources (TSX:CNQ), TC Energy (TSX:TRP), and Tourmaline Oil (TSX:TOU) have emerged as the must-buys for 2024. Here’s why these three energy stocks deserve a spot in your portfolio.
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CNQ stock
CNQ stock has a history of resilience and profitability that makes it a favourite among investors. Its recent third-quarter (Q3) 2024 results showed a net income of $2.27 billion. Down slightly, but impressive considering industry fluctuations. With a 26% profit margin and a dividend yield of 4.49%, CNQ offers steady returns. The energy stock’s focus on operational efficiency, coupled with its diversified asset base, positions it as a stronghold in the energy sector as oil demand remains robust.
CNQ’s approach to debt management and its diversified production profile have kept it financially flexible. Despite a slight dip in revenue, CNQ’s earnings exceeded analyst estimates, highlighting its cost discipline. Investors looking for reliable cash flow through dividends will find CNQ appealing, particularly with its history of dividend growth.
TRP stock
Next up, TRP stock has had a busy 2024, enhancing its financial position and expanding its service base. In Q3, TC Energy increased its comparable earnings before interest, taxes, depreciation, and amortization (EBITDA) by 6% year over year. A sign of its strong operational model. TRP also managed to reduce capital expenditures, boosting its balance sheet. Its dividend yield of 4.85% is appealing for income-seeking investors. And the company’s focus on LNG exports and renewable projects makes it a solid long-term investment, offering both growth and stability.
For TC Energy, asset sales and project completions have provided the company with ample cash flow to support its growth plans. Its focus on reducing leverage and advancing new infrastructure projects solidifies TC Energy’s role as a dependable income stock. Additionally, investments in LNG infrastructure cater to rising energy demands, making it an excellent choice for forward-looking investors.
Tourmaline stock
Tourmaline stock, Canada’s largest natural gas producer, has been a top performer. TOU posted Q3 earnings with revenue growth of 23% year over year, supported by a 24% profit margin. This aligns with analyst expectations, and the stock has remained relatively stable amid a volatile market. TOU’s strategy of balancing special dividends and share buybacks enhances shareholder value. And with natural gas demand expected to rise, the energy stock is well-positioned for the future.
Tourmaline Oil’s focus on cost-efficient operations sets it apart. The company’s projected 22% revenue growth over the next three years outpaces industry averages, driven by strong demand for Canadian natural gas. TOU’s payout ratio remains conservative, providing flexibility for both dividend growth and reinvestment.
Bottom line
For income-focused investors, the dividend history of these companies speaks volumes. CNQ, TRP, and TOU all boast solid dividend yields, with TRP leading at 5.62% over the past year. The steady payout ratios of these companies ensure that investors benefit from both growth and income — that’s rare in such a cyclical sector.
Looking ahead, each of these companies is positioned well for future growth. CNQ’s efficiency improvements and diversified asset base, TRP’s infrastructure projects and dividend reliability, and TOU’s focus on shareholder returns and natural gas dominance provide a mix of stability and upside potential. With robust balance sheets and forward-looking projects, these stocks are well-prepared for the energy market of tomorrow.
