It sounds like some investors with a long-term view are looking at the energy sector in Canada for reliable income. Even with the ups and downs in the energy market, there are some companies listed on the TSX that have shown they can stick around and keep paying dividends. Let’s look at three of them, namely Enerflex (TSX:EFX), CES Energy Solutions (TSX:CEU), and Precision Drilling (TSX:PD). Each has its own strengths that might make them interesting if you’re planning to hold onto energy stocks for a while.
Enerflex
First up is Enerflex. This company, based in Calgary, knows a lot about natural gas. The energy stock specializes in things like compressing and processing natural gas and also offers electric power solutions. Looking at the financial report for the last three months of 2024, Enerflex brought in revenue of $561 million, which contributed to a total of $2.4 billion for the whole year.
Furthermore, the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which gives you an idea of their operating profit, was $432 million for the year, and it held a free cash flow of $222 million. What’s also good to see is that Enerflex has been paying down its debt. The net debt is now $616 million, and net debt compared to its EBITDA is at a healthy 1.5 times, which suggests it’s in a pretty good financial position. The energy stock currently holds a 1.68% dividend yield.
CES
Next, we have CES Energy Solutions. This energy stock provides chemical solutions that are used by the oil and gas industry. For the year ending on Dec. 31, 2024, CES reported revenue of $2.4 billion, which is a nice 9% increase from the year before. It also seems to be quite profitable, with a return on equity of 25.96% and a profit margin of 8.12%.
Return on equity tells you how well an energy stock is using shareholders’ investments to generate profit, and a profit margin shows how much profit it makes for every dollar of revenue. CES’s consistent performance and the fact that it seems committed to giving returns to shareholders could make it an interesting choice if you’re focused on dividends. The energy stock currently holds a 2.77% dividend yield.
Precision
Finally, there’s Precision Drilling. This energy stock is a major provider of drilling and completion services for the oil and gas industry. In the third quarter of 2024, Precision Drilling reported earnings per share of $2.31. That was actually better than what analysts were expecting, which was $2.09 per share.
The revenue for the past 12 months stands at $1.9 billion, and net income was $111.19 million. These solid financial results and Precision Drilling’s strong position in the market suggest that the energy stock has a good capacity to sustain dividend payments over the long term. The energy stock currently does not offer a dividend, but with so much cash coming in, it could certainly offer one in the near future.
Bottom line
Investing in these three companies gives you exposure to different parts of the energy sector. Enerflex is on the equipment and services side, CES provides important chemical solutions, and Precision Drilling is a key player in the drilling and completion of wells. Because they’ve all shown solid financial performance and have strategic positions within the industry, they could be good candidates for potential long-term dividend growth. As always, it’s a smart idea for investors to do their own thorough research and think about their own financial goals before making any decisions about where to put their money.
