While uncertainty looms large these days, Canadian energy stocks continue to have a lot of potential. The demand for energy remains strong, and Canada remains a reliable source of low-cost oil and gas.
This means that there are plenty of attractive Canadian energy stocks that investors should consider buying. These stocks might have been hit along with recent market weakness, but that just means that they’re on sale today.
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Market volatility hits all stocks, including Canadian energy stocks
The U.S. trade tariffs have shaken stock markets worldwide – understandably. It is a move that has placed the whole notion of international trade at risk. Simply put, it risks undoing many decades of progress toward an interconnected, economically prosperous world. And it risks pushing nations into economic recession if it continues.
Global markets are being hit as a result, with major North American indices falling roughly 8% since early April. Within the Canadian energy space, I continue to be very positive on natural gas. This means that I’m also very positive on natural gas producers like Tourmaline Oil Corp. (TSX: TOU).
But this stock hasn’t escaped the carnage. In fact, it’s down 15% this month alone. Let’s take a step back and look at the company and the industry.
Natural gas benefiting from strong demand
The price of natural gas has almost doubled in the last year. This has been primarily driven by three main sources. The first is increased demand for North American liquified natural gas (LNG) as global demand has remained strong. The second is an increase in domestic demand from the electric power sector. The last is the continued switch away from coal to natural gas.
These trends are alive and well today. And they show no signs of stopping. This is why I’m positive on natural gas, and why I’m investing in Canadian energy stocks. North America has the most abundant natural gas reserves. But that’s not all. These reserves are high quality, low cost, reliable, and increasingly accessible to global markets. Well, with all these tariffs, the U.S. may no longer be reliable. But Canada is.
More on why I like Tourmaline
Tourmaline is Canada’s natural gas producer. The company has grown significantly in the last few years, and its dividend has gone along for the ride. In fact, Tourmaline paid out record dividends in 2024 – a regular dividend of $1.40 per share along with special dividends totalling $2 per share. This brought the company’s dividend yield to an impressive 5.7% based on today’s share price.
Looking ahead, the emerging LNG industry is one that offers Tourmaline big growth potential. For example, LNG Canada is located in Kitimat, British Columbia. First shipments out of this facility are expected sometime in 2025. The facility boasts one of North America’s shortest shipping routes to Asia. Also, it’s a deep water, ice-free port. Finally, it has the necessary infrastructure, such as rail transportation and pipelines to transport natural gas to the facility.
Other Canadian exporters are seeing strong global demand, particularly from Asia. Tourmaline is well set up to supply these terminals and facilities with the natural gas needed.
The bottom line
Tourmaline is one energy stock that I remain invested in for the long haul. The company offers strong growth as well as a growing dividend. As the U.S. continues with its tariff wars, Canadian natural gas is more valuable than ever. Tourmaline is very well-positioned for tariff wars.
