Canadian investors have seen plenty of stock market volatility in recent months, especially due to the tariff-induced turbulence since President Donald Trump’s inauguration earlier this year. Between April 2 and April 8, 2025, the S&P/TSX Composite Index seemed to drop off a cliff, experiencing an 11.07% downturn. Such a sudden decline within the space of less than a week in the benchmark index for the Canadian stock market understandably left many investors reeling.
However, investors began pumping money back into the market after a 90-day pause on tariffs was announced. Between April 8 and May 9, 2025, the stock market has recovered by over 12.60% and seems to be getting closer to its 52-week high. As the market seems to recover, it might be a good time to consider a couple of contrarian picks in sectors of the Canadian economy that have taken a hit amid the market instability.
Suncor Energy
Suncor Energy (TSX:SU) is a battered and bruised energy stock. As of this writing, it trades for $48.72 per share, down by almost 17% from its 52-week high. Suncor is a $60.62 billion market-cap Calgary-based integrated energy company. Its operations consist primarily of oil sands development, production, and upgrading. It has significant offshore oil and gas petroleum refining operations in Canada and the United States. The company also boasts PetroCanada retail and wholesale distribution networks, letting it generate revenue from the crude product to end-user sales of the commodities.
Declining West Texas Intermediate (WTI) oil prices over the last year are primarily the reason for the pullback in its share prices. Lower oil prices mean reduced margins for its production operations. However, that also means lower input costs for its refineries to recover some of the lost margins in downstream operations. Analysts expect the oil market to remain strong through to 2026, which can mean good news for Suncor investors getting in on the stock at current levels.
Enbridge
Enbridge (TSX:ENB) is another player in the Canadian energy sector but operates primarily as an energy infrastructure company. The Calgary-headquartered multinational pipeline and energy infrastructure company boasts a $140.18 billion market capitalization. It owns and operates pipelines throughout Canada and the U.S., transporting crude oil, natural gas, and natural gas liquids.
Enbridge also has a growing portfolio of renewable energy assets and is one of the biggest natural gas utility businesses in North America. Lower commodity prices do not have as much of an impact on ENB stock, and its performance on the stock market reflects that.
As of this writing, ENB stock trades for $64.30 per share, down by just 2% from its 52-week high. The stock is up by 38% from its 52-week low and boasts a juicy 5.86% dividend yield that you can lock into your portfolio today.
Foolish takeaway
Between the two energy companies, Suncor Energy stock might seem like the riskier pick due to its recent performance. Enbridge stock still seems to be gaining momentum for a recovery to newer heights. However, both stocks seem well-positioned to deliver substantial long-term returns through dividends and capital gains. If you have some money to put to work in the stock market, I would consider allocating at least a portion of it to these two TSX energy stocks.
