Finding a Canadian energy stock that’s a steal can be one of the smartest long-term moves an investor can make. The sector is packed with high-quality companies that generate enormous cash flow yet often trade at deep discounts. Energy stocks tend to get overlooked when oil prices dip or headlines focus on renewables, but that’s exactly when seasoned investors step in.
Global energy demand should keep rising for decades, especially for natural gas and transition fuels. Therefore, picking up a well-managed Canadian energy stock on sale can set you up for steady income, capital growth, and resilience through whatever the markets throw next.
Consider TPZ
Topaz Energy (TSX:TPZ) is one of those rare Canadian energy stocks that quietly delivers everything investors want including steady income, growth potential, and minimal risk. And yet, it rarely gets the spotlight. That’s exactly what makes it a steal right now. It doesn’t drill, explore, or shoulder the high capital costs that traditional energy stocks face. Instead, it earns royalty and infrastructure income from Canada’s most efficient producers, collecting steady cash flow while others do the heavy lifting.
Topaz was spun out of Tourmaline Oil, Canada’s largest natural gas producer, and still benefits from that close partnership. Its assets include royalty interests on over six million acres of land and ownership in key midstream infrastructure used by major natural gas producers. This combination creates a capital-light, high-margin model that converts more than 90% of revenue into free cash flow. Because it doesn’t operate wells itself, Topaz avoids drilling risk, cost overruns, and the headaches of fluctuating commodity prices. It simply collects fees and royalties, producing stable earnings quarter after quarter.
Numbers don’t lie
Financially, Topaz is one of the cleanest energy stocks on the TSX. In its most recent quarter, the energy stock reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $251.7 million, and free cash flow of $73 million, a remarkable figure for a company with such modest operating risk. Debt remains low, giving Topaz plenty of flexibility for future acquisitions or dividend increases. Its disciplined management has built a strong reputation for capital allocation, using cash flow to fund growth while maintaining a generous return to shareholders.
And that return is hard to ignore. Topaz currently offers a dividend yield of around 5.2%, fully covered by its predictable cash flow. The energy stock has raised its dividend repeatedly since going public in 2020, even through volatile energy markets. Unlike most producers whose payouts rise and fall with oil prices, Topaz’s dividend stability comes from its fixed-fee and royalty-based structure. Investors can rely on regular, growing income without worrying about sudden cuts when commodity prices dip.
A valuable buy
Analysts across the board all rate it “Outperform,” highlighting its low-risk cash flow and room for expansion through new royalty deals with top-tier producers. One recent note even called Topaz “one of the most under-appreciated income growth stories in Canadian energy,” citing its long-term agreements and inflation-linked royalties as reasons its cash flow should continue to climb steadily.
Topaz also has a hidden advantage in Canada’s energy transition story. As the industry focuses on lower emissions and capital discipline, producers increasingly sell non-core infrastructure or royalty interests to companies like Topaz to free up cash. That trend gives Topaz a constant pipeline of acquisition opportunities. In short: there’s more to come for this energy stock.
Bottom line
Topaz is the kind of energy stock value investors dream about. It offers steady cash flow, reliable dividends, a rock-solid balance sheet, and growth without the drama. In fact, here’s how much a $7,000 investment in the energy stock could bring in from dividends alone.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL ANNUAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| TPZ | $26.46 | 264 | $1.36 | $358 | Quarterly | $6,986 |
All together, this is a royalty and infrastructure play disguised as an energy stock, quietly compounding in the background while others fight market volatility. For investors looking for a stable, high-yield, under-the-radar energy name that can thrive through any cycle, Topaz isn’t just a good buy, it’s a genuine steal.
