The energy sector has been under pressure this year, with commodity price volatility shaking up stock performance. But despite the turbulence, the energy demand isn’t going anywhere. Many companies in this space continue to generate strong profits and reward investors with reliable dividend payouts, making them no-brainer stocks to buy now.
Thus, investors planning to buy top energy stocks with $1,000 right now could consider Canadian Natural Resources (TSX:CNQ), Brookfield Renewable Partners (TSX:BEP.UN), and Enbridge (TSX:ENB). These Canadian stocks have fundamentally strong businesses that generate steady and growing cash flows. Let’s take a closer look.
Source: Getty Images
Energy stock #1
Canadian Natural Resources is a top energy stock for investors seeking growth and income. This leading oil and gas producer has a diverse asset base, primarily in Canada, with additional operations in the U.K.’s North Sea and offshore Africa. Its well-balanced production of crude oil, natural gas, and natural gas liquids provides flexibility and resilience in changing market conditions.
One of the company’s biggest strengths is its long-life, low-decline production, which makes up most of its planned liquids output. A key component of this is its high-value, zero-decline synthetic crude oil (SCO) from oil sands mining operations. The remaining production comes from thermal oil sands and heavy crude assets. Thanks to these stable, long-lasting reserves, along with low replacement costs and efficient operations, Canadian Natural generates strong cash flow throughout market cycles.
Canadian Natural also has a strong inventory of low-capital projects that can be quickly executed when market conditions are favourable. With high ownership and operational control over its assets, the company optimizes development timing to maximize shareholder value.
The company is financially strong, with an impressive record of increasing its dividend per share for 25 consecutive years. It offers a solid 5.4% dividend yield and has delivered over 213% capital gains in the past five years. Its solid total returns make it a no-brainer energy stock.
Energy stock #2
Brookfield Renewable Partners is an attractive stock to gain exposure to the green energy sector. The company is poised to benefit from its diversified renewable energy assets and highly contracted portfolio. Approximately 90% of its energy generation is backed by long-term contracts, with nearly 70% of its revenue tied to inflation. This structure ensures stable cash flow and helps expand operating margins, providing a cushion against economic volatility.
Moreover, Brookfield has significant opportunities to renegotiate expiring agreements at higher rates. The company has successfully secured new contracts at substantial increases, leveraging the rising demand for clean energy. This re-contracting strategy enhances its funds from operations (FFO) and strengthens its financial position.
Brookfield is poised to capture the growing demand for renewable energy with an extensive installed capacity and a robust development pipeline. This will translate into solid FFO and enable the company to reward investors. Brookfield has a track record of increasing dividends by about 5% to 9% annually. Additionally, it offers a high dividend yield of over 6.9%.
Energy stock #3
Enbridge is a no-brainer energy stock to buy right now. With a diverse portfolio, steady cash flows from long-term contracts, and minimal exposure to commodity price fluctuations, it consistently delivers strong earnings and reliable distributable cash flow (DCF), no matter the market conditions. Moreover, its investments in traditional and renewable energy projects will enable Enbridge to benefit from growing energy demand.
Thanks to its solid asset base and resilient earnings, Enbridge has generously rewarded shareholders. It has increased its dividend per share for 30 consecutive years and is well-positioned to continue raising it in the future.
The high utilization of its energy infrastructure assets, contractual arrangements, focus on optimizing its operations, and low-cost expansion opportunities will support its financial growth, dividend increases, and share price appreciation over the long term. Right now, it offers an attractive dividend yield of 6.3%.
