The right TSX stocks to buy in a volatile oil price environment are those that have stable and dependable cash flows and earnings. These are the companies that have exposure to strong energy markets but have figured out a way to lessen or mitigate their dependence on oil prices.
Oil prices are currently trading at just under US$70. In the last year, the price of oil has ranged from lows of $56 to highs of more than $110. This has clearly been a challenging year for those TSX stocks that rely heavily on the price of oil.
Stability and predictability are highly valued by many investors. In this article, I’d like to review two TSX stocks that have managed to take the volatility out of their financial performance. This means relatively stable results regardless of the price of oil.
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Enbridge
As one of North America’s leading energy infrastructure companies, Enbridge Inc. (TSX: ENB) has an extensive footprint of pipelines, utilities, and storage facilities to meet rising energy demand.
This has enabled the company to reliably generate strong and predictable earnings. In the last five years, Enbridge’s earnings per share (EPS) have increased 10%. This has been accompanied by strong cash flow generation and annual dividend increases. In fact, Enbridge has a 31-year history of annual dividend increases, with a compound annual growth rate of 9% in this time period.
This dividend record has been made possible by Enbridge’s strong and reliable earnings and cash flow stream. Its business model is very much sheltered from both the macroeconomic environment and, more specifically, the price of oil. The company’s utility segment provides high-quality cash flows that are regulated. Enbridge’s energy infrastructure assets provide predictable cash flows due to the fact that they’re governed by long-term and/or take-or pay contracts. This is downside protection for Enbridge, and stability for investors.
Enbridge stock is currently yielding a very generous 5%.
Suncor Energy
As Canada’s largest integrated oil and gas company, Suncor Energy Inc. (TSX: SU) also has a business model that’s sheltered from the volatility of oil and gas prices. And given recent efforts by management to further reduce the company’s exposure to volatile oil prices, Suncor is increasingly sheltered.
Of course, Suncor stock will still fluctuate somewhat with changes in oil prices. Yet, its integrated business provides diversification that serves to smooth out the company’s results. For example, weakness in the upstream segment might be offset by strength in its refining segment. Finally, Suncor is working to increase efficiencies and lower its break-even oil price. This will further decrease the company’s vulnerability to volatile oil prices.
In the fourth quarter of 2025, the average West Texas Intermediate (WTI) oil price was $59.31 per barrel. During this time, Suncor’s average realized price was $70.86. That’s almost 20% higher than the WTI price. This is made possible by Suncor’s value-added upgrading process, which refines crude oil into products such as gasoline, jet fuel, and petrochemicals.
For dividend investors, Suncor stock is currently yielding a respectable 3%.
The bottom line
Enbridge and Suncor stock both have business models that were built to benefit from strong oil and gas markets. But they benefit without suffering through the short-term gyrations of oil prices. They take a steadier, longer-term path that is characterized by less volatility and more predictability.
