Canada’s energy sector Is full of opportunities for investors. Some of those energy stocks continue to showcase impressive long-term appeal while generating a healthy income.
Here are two standout energy stocks to consider for your portfolio today.
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Consider this diversified energy sector titan
One of the first energy stocks for investors to consider is Enbridge (TSX: ENB). Enbridge is one of the largest energy infrastructure companies on the planet. The company is best known for its lucrative pipeline business, which transports both crude and natural gas.
The pipeline business generates a passive, toll-road-like revenue stream. Even better, the revenue generated by the pipeline business is largely insulated from oil price volatility thanks to long-term contracts.
Adding in the sheer amount of crude and natural gas hauled by Enbridge, and you have one of the most defensive moats in the entire energy sector.
But that’s not all.
Enbridge also offers investors exposure to a growing renewable energy and natural gas utility portfolio. The renewable business includes a network of nearly 40 facilities located across North America and Europe. The natural gas utility boasts 7 million customers across North America.
Both segments generate stable, contract-backed revenue that supports both growth and Enbridge’s reliable quarterly dividend.
As of the time of writing, the quarterly dividend offers a yield of 5.8%. This fact alone makes Enbridge one of the best energy stocks for investors to buy.
Prospective investors looking at energy stocks like Enbridge should note the company has provided annual bumps to that dividend going back over 30 consecutive years without fail.
Here’s a one-stop shop of the entire energy sector
Among Canada’s diversified mix of energy stocks, Suncor (TSX: SU) is one that stands out thanks to its integrated business model. As an integrated energy company, Suncor operates across the entire energy value chain.
In other words, Suncor produces oil, refines it into fuels and then sells those fuels, even directly to consumers through its Petro-Canada network.
The appeal of a vertically integrated energy company like Suncor is significant. This is because volatility in one area (such as a drop in oil prices) can be offset partially by strength in another (fuel retail profits).
Suncor is best known for its oil sands operations and Petro-Canada network, but it is expanding into new areas. More recently, the company has become known for its growing “Electric Highway”, which is a fast-charging EV network.
Suncor is also targeting upstream output increases of more than 100,000 barrels per day through 2026, putting high refinery utilization in the mid-90% range. This, in turn, allows Suncor to generate stronger profits, leading to further investment and higher dividends.
Speaking of dividends, Suncor has paid out dividends without fail for over three decades. This adds to its appeal as one of the superb energy stocks to buy. As of the time of writing, Suncor offers a tasty 4.1% yield. This makes it an attractive option for investors seeking growing, reliable income.
Your energy stocks to buy today
No stock is without risk. Both Enbridge and Suncor are top energy stocks. They both provide a great mix of defensive appeal and growth in addition to a growing dividend income.
In my opinion, one or both belong in any well-diversified portfolio.
