Natural gas is a non-renewable mixture of methane and other hydrocarbons that forms naturally underground and is widely used as fuel. In Canada, it plays a central role in heating homes, powering industrial activity, and generating electricity across multiple provinces. Its relatively cleaner combustion compared to coal and oil has also made it an important transitional energy source as the world gradually shifts toward lower-emission alternatives.
Canada is one of the world’s largest natural gas producers, supported by vast reserves in Alberta and British Columbia and a growing LNG export strategy aimed at supplying global markets. These factors have positioned Canadian natural gas companies as key players in both domestic energy security and international energy trade.
The question for investors is whether these companies offer attractive opportunities in today’s evolving energy landscape. To help answer that, here’s a closer look at the top Canadian natural gas stocks to watch in 2026.
Related: List of stocks in the TSX energy sector
What are natural gas stocks?
Natural gas stocks are those companies involved in the production, processing, and sale of natural gas. Also included are companies that produce natural gas machinery and equipment, and those that provide support services like logistics and staffing.
Natural gas stocks fall under the umbrella of the energy sector given the close relationship between natural gas and other petroleum products.
Companies involved in natural gas can be classified broadly as either:
- Upstream: Deal primarily with exploration and initial production of natural gas.
- Midstream: Deal primarily with transportation of natural gas.
- Downstream: Deal primarily with refining and distribution of natural gas.
As a commodity, the price of natural gas is elastic, meaning that it is heavily influenced by supply and demand, which can be cyclical. As a result, natural gas companies have a higher beta, a measure of market volatility. Other risks to note include political/regulatory risk for mining sites and geological/environmental risks from operations.
The natural gas industry often experiences large tailwinds during times of inflation due to rising commodity prices. As energy prices soar, natural gas companies can enjoy higher revenues, better margins, and improved earnings, which can translate to a higher valuation and share price.
Top natural gas stocks in Canada
Here are some of the top natural gas stocks on the Toronto Stock Exchange (TSX), in order of highest market cap.
| Company | Description |
| Suncor Energy (TSX:SU) | Suncor is an integrated oil and gas company with interests in oil sands, natural gas, and renewable energy exploration, production, refining, supply, and trading. |
| Cenovus Energy (TSX:CVE) | Cenovus is an integrated oil and gas company with crude oil and natural gas operations in Canada and the U.S. |
| Tourmaline Oil (TSX:TOU) | Tourmaline is a crude oil and natural gas exploration and production firm operating primarily in Western Canada. |
Suncor Energy Inc.
Suncor remains one of Canada’s largest integrated energy companies, with operations spanning oil sands production and upgrading, offshore oil and gas, refining, and nationwide retail distribution through its Petro-Canada brand. The company also maintains exposure to lower-emission energy initiatives, including hydrogen, ethanol, wind, and solar.
In 2025, Suncor delivered strong operational performance. Third-quarter production rose to 870,000 barrels per day (bbls/d), up from 829,000 bbls/d in the prior year. Refining throughput reached a record 492,000 bbls/d, while retail refined product sales hit 647,000 bbls/d, underscoring the strength of its integrated model.
Financial results were robust despite softer commodity prices, with Suncor reporting $1.8 billion in adjusted net income, $1.50 in EPS (beating estimates by $0.34), $3.8 billion in adjusted funds from operations, $3.8 billion in cash from operations, and $1.5 billion returned to shareholders through $750 million in buybacks and $700 million in dividends.
The company also raised its dividend by 5%, bringing the yield to 3.8%, while shares now trade near $63—up from $45 earlier in the year and more than triple the 2020 lows. These results, supported by cost reductions, greater efficiency, strong refining margins, and a diversified asset base, highlight Suncor’s ongoing resilience.
Looking forward, slower EV adoption and expanding pipeline capacity may support future volumes across Suncor’s upstream, refining, and retail operations, strengthening its long-term outlook.
Cenovus Energy Inc.
Cenovus is an integrated oil company involved in producing, transporting, and refining crude oil and natural gas, with operations across Alberta, Western Canada, and U.S. refining facilities. It operates through oil sands, conventional, offshore, manufacturing, and retail segments, exporting products such as gasoline, diesel, asphalt, and natural gas liquids.
Its natural gas assets fall under the conventional segment, which includes processing and power-generation interests in the Elmworth-Wapiti, Kaybob-Edson, Clearwater, and Rainbow Lake regions. Today, Cenovus is one of Canada’s largest energy companies with a $47 billion market cap and a 3.2% dividend yield at about $24.56 per share.
In 2025, the company strengthened its long-life, low-cost asset base through the acquisition of MEG Energy, adding roughly 110,000 barrels per day to production. Q3 2025 results reflected this boost, with net earnings and free funds flow rising to $1.3 billion and upstream production hitting a third-quarter record of 832,900 boe/d.
Cenovus expects the Narrows Lake and West White Rose projects to be completed in 2026, which should reduce capital spending and increase free funds flow. The company has consistently paid dividends since resuming them in 2021, distributing $356 million in Q3 2025 along with $918 million in share buybacks. With strong long-term performance, an integrated model that hedges volatility, and a growing production profile, Cenovus remains a solid—though higher-risk—option for energy investors.
Tourmaline Oil Corp.
Tourmaline is Canada’s largest natural gas producer and the fifth largest in North America, with about 80% of its production coming from natural gas. Operating across the Alberta Deep Basin, NEBC Montney, and Peace River High Triassic oil complex, it remains a major supplier to U.S. and international buyers, including the Gulf Coast LNG export market.
The company has expanded through strategic acquisitions, including its C$1.3 billion all-stock purchase of Crew Energy in 2024, which is set to add over C$200 million to 2025 free cash flow and lift production to the 582,500–592,500 boe/d range. Tourmaline has also committed to returning excess cash to shareholders, delivering a 256% dividend-adjusted return since 2015 and offering a current 3% yield with potential for more special dividends.
Even amid historically low AECO gas prices and pipeline maintenance in Q3 2025, Tourmaline reported strong results: 634,750 boe/d in production, $720 million in cash flow, and $190 million in earnings. Natural gas prices have since rebounded sharply, supported by LNG Canada’s opening and rising grid-electrification demand. Analysts expect significant free cash flow growth through 2029, with the stock potentially doubling by 2028, making Tourmaline an attractive, gas-leveraged long-term pick trading about 28% below its highs.
Investing in Canadian natural gas stocks
Globally, Canada ranks high in terms of the production (4th) and export (6th) of natural gas, with a small number of integrated oil & gas companies accounting for the majority of output.
Canadian’s looking to buy domestic natural gas stocks should begin their search in the energy sector of the TSX. From there, it is important to determine if the company under consideration is involved primarily in natural gas as a pure-play or operates as an integrated oil and gas company.
The former derives most of its revenues from natural gas, whereas the latter deals with a broad range of petroleum products, such as crude oil. This is important to note if you only want exposure to natural gas stocks instead of the broader energy sector.
When considering Canadian natural gas stocks, many of the same considerations for fundamental analysis and valuation that apply to the energy sector should be considered:
- Is the company’s balance sheet healthy? What is the current ratio and long-term debt to equity ratio? Is there negative shareholder equity?
- Has the company consistently grown quarterly revenues and earnings year over year? If so, at what rate?
- Are the company’s gross and operating margins positive and ample?
- How does the company’s enterprise value-to-EBIDTA ratio compare with that of peers in its sector?
- What are the company’s price-to-book, price-to-sales, price-to-free-cash-flow, and price-to-earnings ratios, and how do these compare to peers in its sector?
- What does the company’s return on assets, return on equity, and return on invested capital ratios look like?
- Does the company have a decent cash runway and sufficient cash flow for long-term operations?
- Has the company run afoul of any environmental regulations recently and historically?
- Does the company attempt to hedge its exposure to commodity price fluctuations?
- Does the company pay a dividend? If so, how many years of consecutive dividend payments has it made? Is the current payout ratio sustainable and not excessively high?
- Has the company grown dividends consistently? What is the five-year dividend growth?
Are Canadian natural gas stocks right for you?
Investing in Canadian natural gas stocks is higher on the risk-reward spectrum compared with more “boring” sectors like consumer staples or industrials. Natural gas stocks also tend to have higher betas, which makes them more volatile compared with the overall market. Because they are energy stocks, natural gas stocks form a substantial portion of the TSX already, so investors should be cautious to not overweight them if they already hold Canadian index funds.
Like most energy sector stocks, natural gas stocks may also prove to be a good defensive holding against high inflation. One of the main drivers of inflation is a rise in the price of energy commodities, including natural gas. When prices rise, companies that produce, process, and sell natural gas can generate stronger revenues, as the value of stored inventory on their balance sheets improves.
A risk of investing in natural gas stocks is their susceptibility to commodity prices, especially if they take a downturn (like when crude oil hit negative prices during the COVID-19 crash). Drastic swings in the cost of energy commodities can affect the balance sheets and future earnings of natural gas companies. While these companies can hedge these risks via the use of futures and forward derivatives, there is no guarantee that this is 100% effective.