Given the global nature of the stock market, investors have plenty of options to choose from when considering which stocks should fit within their portfolios.
It’s my view that investors looking for top-tier opportunities in the global marketplace ought to consider at least owning some exposure to the Canadian market. For one, this is a very resource-rich market, with a highly-educated workforce and some incredible (and novel) new technologies worth exploring.
In this current macroeconomic environment, which is being shaped by increasingly frequent commodity price shocks, here are a couple resource companies I think investors may want to own right now as a way to battle surging inflation.
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Canadian Natural Resources
One of the companies I think can currently act as a real inflation hedge is Canadian Natural Resources (TSX:CNQ).
Shares of the energy producer have been on a strong trend higher, surging more than 200% over the past five years. Much of this growth can be directly attributable to the commodity price cycle, which has certainly benefited companies like Canadian Natural.
That said, I think there are other positive drivers which could be even more important for investors to consider. First, this is a company with plenty of operating leverage, driven by its long-life low-decline asset base. With one of the best margins in the industry, and decades of runway to continue producing energy at even higher margins. Accordingly, those banking on Canadian Natural’s longstanding dividend growth streak continuing have plenty to like.
With a strong balance sheet that’s greatly improved in recent years thanks to debt pay down and plenty to like about the trajectory Canadian Natural is on, this is a stock I think is worth owning as a way to battle inflationary pressures right now.
Enbridge
While many advanced economies are clearly undertaking a shift toward renewable energy (and that’s a battle I think is worth fighting), the reality is that we’re going to need fossil fuels for some time. In this section of the market, Enbridge (TSX:ENB) is one of the best options for investors to consider right now in my books.
Why is that? Well, Enbridge has the largest network of pipelines in North America of any company. Given the company’s less-sensitive business model (at least relative to commodity prices), there’s a level of stability this particular company provides relative to Canadian Natural and other large energy producers.
With nearly all of the company’s earnings driven by long-term cost-of-service contracts or fixed-fee contracts, this is an energy adjacent name that provides a level of cash flow and earnings stability that’s hard to find.
So, for those who expect to see Enbridge’s record 2025 results improve in the coming years, this is a stock that’s still worth buying, even as its share price approaches the $80 level.
