Gas Prices Spiking? The Energy Dividend Stocks I’d Hold Through Volatility

Are energy stocks a smart investment to offset gas price volatility? Discover two dividend stocks offering steady returns despite market ups and downs.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published September 23, 2025 4:30 pm EDT

| More on: CVEGEI

Key Points

Look for energy dividend stocks with a strong history of consistent payouts, resilient through market cycles.
Ensure companies have strong cash flow and manageable debt to maintain dividends even in volatile times.
Choose companies with clear growth plans and diverse projects to ensure future earnings and competitive advantage.

Gas prices. These have constantly been an issue when it comes to our daily lives. The worst part? It’s almost impossible to budget when the price surges up and down. Yet there is a way to offset some of those costs, and that’s through investing.

But hold on, because when it comes to dividend stocks, energy stocks can be some of the best. Yet some of these energy stocks are volatile during these times of fluctuating gas prices, whereas others are not. That’s why today we’re going to look at what to consider when choosing energy dividend stocks, and two that fit the bill.

Hourglass and stock price chart — Source: Getty Images

What to watch

If you’re looking at energy stocks that can support a dividend long term, there are a few items to consider. First, look for dividend stocks with a strong dividend history, maintaining yields through every type of market cycle. High yields can look enticing, but the company needs to sustain those payouts.

Then there’s cash flow. Investors will want to evaluate the dividend stock’s ability to generate stable operating cash flow, which supports those dividend payments even in volatile markets. Strong cash flow means strong financial health, thus the ability to maintain dividends. This would mean looking at debt as well. Companies with manageable debt levels and strong balance sheets are better positioned to weather the rough ride and keep dividends going. A low debt-to-equity ratio can be your best friend.

Finally, there’s future growth. Efficient operations and effective cost management not only buffer volatile prices but also allow companies to expand. So consider companies that have a clear growth strategy with ongoing projects to contribute to future earnings, whether through strategic acquisitions or infrastructure upgrades. And ideally? Those growth projects are diverse, operating in different areas and segments to maintain a competitive edge.

Two to consider

With all this in mind, let’s look at two options for investors on the TSX today, Cenovus Energy (TSX: CVE) and Gibson Energy (TSX: GEI). First, Cenovus, which offers a dividend yield of 3.4% – not the highest, but still appealing. Its focus remains on returning capital to shareholders through buybacks as well as dividends. And the dividend stock remains strong, with $2.4 billion generated from operations, allowing room to reduce debt and return cash to shareholders. What’s more, the company is growing through the Narrows Lake and West White Rose offshore initiatives. These projects allow it to maintain operational efficiency, crucial during volatility.

As for Gibson, it holds a high 6.5% dividend yield at writing, which again is quite attractive for those seeking consistent income. It also has the completion of key projects underway, such as Gateway dredging, which has enhanced throughput and operational capacity. Therefore, Gibson is looking more stable than ever. Investors will want to keep an eye on debt, but this should normalize by 2026.

Bottom line

Both Cenovus and Gibson offer strong dividend stocks for those seeking long-term income amid gas price volatility. Cenovus offers a balanced approach for growth and income, with Gibson holding a higher yield. Investors should therefore consider each company and how each aligns with your investment strategy, especially during times of volatility.