Canada is blessed with an abundance of energy, and by extension, energy stocks. Not only can those stocks provide plenty of growth, but as energy bulls will confess, they offer juicy yields, too.
Here’s a trio of options for energy bulls to consider adding to any portfolio.
Source: Getty Images
Let’s start with a good mix
One of the first stocks that should be on the radar of energy bulls is Enbridge (TSX: ENB). Enbridge is an energy infrastructure behemoth, boasting a massive pipeline network.
That pipeline network transports crude and natural gas to refineries and storehouses across the continent. Enbridge charges for use of that network, and incredibly, not based on the volatile price of the commodity hauled.
This means that Enbridge generates a recurring and stable source of revenue, allowing it to invest in growth and pay out a very attractive dividend.
Adding to that appeal are two other key points.
First, Enbridge offers significant defensive appeal. The company hauls massive amounts of crude and natural gas. Specifically, that works out to one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S.
And finally, we have Enbridge’s other units. Apart from its pipeline business, Enbridge also boasts a growing renewable energy business and one of the largest natural gas utility businesses on the continent.
Both are defensive, growing, and help to cover Enbridge’s juicy dividend.
As of the time of writing, that dividend works out to an appetizing 5.8%. Enbridge also boasts an impressive streak of annual increases, going back three decades without fail.
In short, Enbridge is a must-have stock for energy bulls.
Here’s a growth-focused option for any portfolio
Another great option among the energy bulls is Canadian Natural Resources (TSX: CNQ). Canadian Natural Resources is one of the largest energy producers in Canada.
The oil and gas giant boasts a diversified portfolio of assets, including production of natural gas, light crude & NGLs (natural gas liquids), heavy crude and oil sands. Those operations extend outside of Canada, with the company boasting operations in the North Sea as well as in offshore Africa.
Despite its unique appeal, Canadian Natural Resources isn’t resting on its laurels. The company continues to see strong growth, including a pair of announcements this summer.
That includes acquisitions for lands in the Grand Prairie area of Northern Alberta and the Palliser block located in Southern Alberta.
Overall, the company posted net earnings of $2.5 billion, or $1.17 per common share, in the most recent quarterly update. By way of comparison, in the same period last year, Canadian Natural Resources posted earnings of $1.7 billion, or $0.80 per common share.
Turning to income, Canadian Natural Resources really shines. As of the time of writing, the yield on offer works out to a very impressive 5.7%, making this a great addition for energy bulls.
How about an integrated heavyweight?
It would be hard to compile a list of dividend stocks for energy bulls and not mention Suncor (TSX: SU). Suncor offers a fully integrated operation with greater exposure to areas that both Enbridge and Canadian Natural Resources lack.
Suncor’s integrated model is highly focused on the oil sands, where it is one of the largest players on the market. The company also operates refineries for oil and natural gas in both Canada and the U.S. Suncor completes that integrated mix with its Petro Canada retail operation.
The integrated nature of Suncor has several advantages for energy bulls to consider. First and foremost is the defensive appeal. Unlike non-integrated operators that are at the mercy of volatile oil prices, Suncor can, if needed, adjust various levers at different stages of its operation.
The other key consideration is Suncor’s dividend. As of the time of writing, Suncor offers a juicy quarterly dividend that pays out a yield of 4.3%. And like the other companies on this list for energy bulls, Suncor has provided annual bumps to that dividend going back several years.
Energy bulls: Time to buy?
The trio of dividend stocks mentioned above can provide investors with a juicy income. They also benefit from diverse, defensive operations that make them ideal candidates to include in any portfolio.
In my opinion, one or all of the above should be core holdings in any well-diversified portfolio.
