Oil Is Back in Focus: 3 Canadian Stocks to Watch Now

When oil jumps back into focus, investors should usually watch for three kinds of stocks. Those are producers with low-cost barrels, producers with room to grow output without blowing up spending, and midstream giants that can keep generating cash even when crude prices swing around.

The best mix often comes from companies that do not just benefit from stronger oil, but can also hold up if prices cool off again. That’s why balance sheet strength, disciplined capital returns, and clear growth plans matter just as much as the commodity itself.

TVE

Tamarack Valley Energy (TSX: TVE) is a Canadian producer with a big footprint in the Clearwater and Charlie Lake plays, and over the last year it kept leaning harder into Clearwater growth while also increasing shareholder returns. In late 2025, it laid out a 2026 budget with about 70% of spending aimed at Clearwater development and water flood expansion, showing where management sees its best economics.

Fourth-quarter 2025 production averaged 68,635 barrels of oil equivalent per day (boe/d), up 4% from a year earlier, while Clearwater production climbed 16% to 50,049 boe/d. Tamarack also generated about $390 million in free cash flow in 2025 and returned roughly $262.3 million to shareholders through buybacks and dividends. This is more of a cash flow story than a plain earnings multiple story. That adds some risk, but if oil stays firm, Tamarack’s production growth and buyback support could keep it in the spotlight.

HWX

Headwater Exploration (TSX: HWX) is a heavy oil producer, mainly in Alberta’s Clearwater, spending the last year proving it can keep growing volumes while staying disciplined. In January and March, management highlighted strong reserve growth, steady drilling results, and an operations update that pointed to continuing momentum. When investors get excited about oil again, they usually want producers that can translate stronger prices into real cash flow, not just good headlines.

Its latest results looked solid. Headwater posted record 2025 average production of 22,776 boe/d, up 12% from 2024, and generated $326.2 million in adjusted funds flow from operations, or $1.37 per basic share. The stock trades at about 19 times trailing earnings and yields roughly 3.6%, so it is not dirt cheap. However it still looks reasonable for a producer with no net debt and steady operational momentum. The main risk is obvious. Heavy oil names can stay volatile if benchmark prices or differentials turn against them. Still, if oil remains a hot topic, Headwater has the kind of clean balance sheet and growth profile that investors tend to reward.

ENB

Enbridge (TSX: ENB) does not need oil prices to soar to work, but often benefits when energy demand stays strong and investors want dependable income with energy exposure. Over the last year, Enbridge stock kept expanding its gas and pipeline footprint, and it said in December that it expects a higher 2026 core profit as demand stays firm and new projects enter service. That gives investors a different way to play the oil story without taking on the same kind of drilling risk.

The earnings case stayed sturdy. Enbridge stock reported record 2025 results, with annual adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) up by $1.3 billion and adjusted earnings up by $541 million from 2024. It reaffirmed 2026 guidance for adjusted EBITDA of $20.2 billion to $20.8 billion and distributable cash flow per share of $5.70 to $6.10. Enbridge stock trades at about 22.5 times trailing earnings and offers a forward dividend yield above 5.4%, which makes it appealing for investors who want oil-linked relevance without betting everything on crude itself. The risk, of course, is that it will not move as dramatically as a producer in a full oil rally. But for steadier income and scale, Enbridge stock still looks hard to ignore.

Bottom line

If oil stays front and centre, these three stocks offer different ways to play it, plus income through dividends with even $7,000.

That mix gives investors a nice way to watch the oil trade without relying on only one kind of winner.