3 Top Energy Sector Stocks for Canadian Investors in 2025

These energy companies have a solid business model, generate growing cash flows and pay higher dividends to their shareholders.

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Canadian investors planning to buy top energy stocks in 2025 could consider Canadian Natural Resources (TSX:CNQ), TC Energy (TSX:TRP), and Brookfield Renewable Partners (TSX:BEP.UN). These Canadian stocks are supported by solid businesses that generate steady and growing cash flows. Moreover, these fundamentally strong companies consistently pay and increase their dividend payments. Let’s take a closer look.

Canadian Natural Resources 

Canadian Natural Resources is one of the leading oil and gas producers. It benefits from its diversified portfolio, which supports its financials and lowers risk across commodity cycles. Thanks to its long-life, low-decline assets, it maintains stable production that drives earnings. Its ability to generate stellar earnings and cash flows supports its dividend payments and helps it deliver above-average returns.

Created with Highcharts 11.4.3Canadian Natural Resources PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The energy giant has raised its dividend at a compound annual growth rate (CAGR) of 21% for the last 25 years. Moreover, it offers a compelling yield of about 4.4%. Besides higher dividend payments, Canadian Natural Resources stock has grown at a CAGR of over 24.5% in the last five years, delivering overall capital gains of about 200%. Its solid dividend payments and ability to provide stellar returns make it an attractive investment in the Canadian energy space.

The company’s strong balance sheet, focus on strategic acquisitions, and opportunities from low-capital, high-growth projects will likely accelerate its growth in the coming years. Further, its operating efficiency and low reserve replacement costs will contribute to solid earnings and cash flow, supporting higher payouts and share prices.

TC Energy

TC Energy is another compelling bet in the energy space. This energy infrastructure company has a highly contracted and regulated asset base that generates consistent earnings and strong cash flow, supporting higher dividend payments and its stock price.

It’s worth noting that TC Energy has been consistently increasing its dividends, thanks to its growing cash flows. For instance, it has raised its dividend at a CAGR of 7% since 2000. Further, the company projects an annual dividend hike of about 3-5% over the long term. It also offers an attractive yield of 5.7%.

Created with Highcharts 11.4.3Tc Energy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The energy giant’s secured capital projects and high asset utilization rate will continue to expand its earnings and drive higher cash flows. Further, its focus on productivity savings and debt reduction will enable TC Energy to boost its shareholder value and capitalize on growth opportunities.

Brookfield Renewable Partners

Brookfield Renewable Partners is a top investment option to capitalize on increased investments in the green energy sector. It is one of the world’s largest owners and operators of clean energy assets. Brookfield’s long-term contracts and highly diversified renewable assets generate steady cash flow, providing stability and higher dividend payments. Moreover, Brookfield’s strategic acquisitions bode well for future growth.

Created with Highcharts 11.4.3Brookfield Renewable Partners PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The company is poised to benefit from its large operating fleet and expansive development pipeline of renewable power generating facilities. Further, as renewable energy adoption expands, the company’s investments in innovative solutions like battery energy storage will likely accelerate its growth.

With its substantial installed capacity and a significant development pipeline, Brookfield is well-positioned to deliver consistent fund flows, enabling it to enhance shareholder value through increased dividend distributions. Brookfield aims to grow its dividend by 5% to 9% annually. It also offers a high yield of over 6%, making it a compelling bet for income investors.

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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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Renewable Partners and Canadian Natural Resources. The Motley Fool has a disclosure policy.

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