The energy sector has historically been one of Canada’s strongest industries. While the sector struggled in 2024, things may turn around in 2025. With oil and gas prices stabilizing and geopolitical tensions reshaping global energy supply chains, this could be the right time to invest in Canadian energy stocks.
In this article, I’ll highlight two no-brainer energy stocks that you can buy right now with $1,000 for both dividend income and long-term capital appreciation.
Canadian Natural Resources stock
The first no-brainer energy stock you can consider buying right now is Canadian Natural Resources (TSX:CNQ). This Calgary-based oil and gas giant has a well-diversified business model with operations spanning crude oil, natural gas, and oil sands. CNQ currently has a market cap of $89.7 billion as its stock trades at $42.66 per share. The company also offers a solid annualized dividend yield of 5.3%, making it a great pick for income investors.
Lately, CNQ stock has faced some volatility, dipping nearly 3% over the past year and trading about 24% below its 52-week high. But this dip could be an opportunity for long-term investors, especially considering the company’s strong financials. In the third quarter of 2024, Canadian Natural pulled in $8.9 billion in revenue, with an adjusted net profit of $2.1 billion. Despite some year-over-year declines due to fluctuating commodity prices, it continues to generate strong free cash flow, which supports its growing dividend.
As oil prices fluctuate, Canadian Natural continues to focus on expansion. The company recently signed a $6 billion deal to acquire Chevron’s 20% stake in the Athabasca Oil Sands Project. This move will add 62,500 barrels per day to its synthetic crude oil production, further strengthening its low-cost, long-life asset base. On top of that, CNQ stock has been a dividend-growth machine as it has raised its payouts for 25 consecutive years.
Suncor Energy stock
If you’re looking for another strong player in the Canadian energy space, Suncor Energy (TSX:SU) is worth a close look. This Calgary-based integrated energy company is a big name in oil sands production, refining, and retail. After climbing by 24% over the last year, SU stock currently trades at $56.19 per share with a market cap of $70 billion. At this market price, it has a strong annualized dividend yield of 4.1%.
In the fourth quarter of 2024, Suncor delivered $3.5 billion in adjusted funds from operations and $1.9 billion in free funds flow. During the quarter, the company also returned $1.7 billion to shareholders, with $1 billion in buybacks and $700 million in dividends. Its operational performance remained strong, with its production hitting a record 875,000 barrels per day and refinery utilization rate reaching 104%. The energy firm recently launched a new cogeneration facility to cut costs while it continues to focus on reducing debt. Moreover, Suncor’s solid balance sheet, strong cash flow, and focus on efficiency give it the ability to continue rewarding investors with attractive dividends for years to come.
