Motley Fool Premium
  1. Category
    2. /
  2. Investing
    3. /
  3. Energy Stocks
    4. /

Energy Stocks

What are energy stocks? 

Energy stocks represent partial ownership in companies that supply electricity and fuel for the global economy. The energy sector in Canada is vast, comprising a large portion of the TSX. Energy stocks include: 

  • Liquefied natural gas companies
  • Natural gas companies 
  • Oil companies 

(Renewable energy stocks are part of the TSX’s utilities sector.)

How can you pick energy stocks?

1. Look for companies with a promising future 

It’s no surprise that the energy sector is under intense scrutiny. With climate change at the front of many people’s minds (from governments to investors), energy companies, old and new, are constantly adapting to a new world. Many people want cleaner energy. And it’s the energy sector’s challenge to make clean energy available — and profitable, too. 

For that reason, investors will do well to look for innovative companies that are actively solving contemporary energy problems. Though we’re not suggesting investors ignore bigger companies in oil or natural gas, we are suggesting you keep an eye on the future as you’re picking your energy stocks. 

Given the direction the world is going, ask yourself: who will be around in 20, 30, or even 40 years? That’s one of the biggest questions you can answer as an energy stock investor. 

2. Analyze an energy company’s financial standing

The future of an energy company depends in part on how it’s handling its finances now. Given that prices within the energy sector are extremely volatile — just look at how the price of gas fluctuates — you want to be sure an energy company has the financial strength to withstand a recession. Some factors you may want to analyze include: 

  • Strong balance sheet: the company should have lots of liquid cash on hand, as well as a capacity to borrow (if needed). It should also have low amounts of debt and a high investment grade. 
  • Low production costs: the company shouldn’t be spending the majority of its revenue on producing energy. The company should have a stable revenue with minimal exposure to price fluctuations. 
  • Conservative dividend payout ratio: though everyone likes to make money on dividends, if a company dishes too much out, it could end up cutting or reducing its dividend program during hard times. 

3. Check here for our writer’s picks

Our writers are constantly analyzing the energy sector, as they look for Canadian energy stocks that are growing, as well as those that are under- or over- valued. Keep checking back here to see which stocks they recommend — and which they don’t. 

[KevelPitch/]

In addition, you should read up on our Renewable Energy Stocks list.

Check back here for the most up to date information about energy stocks.

Top Articles

Energy Stocks

2 Top TSX Energy Stocks to Buy in January 2023

| Robin Brown

Here are two top TSX energy stocks that had a great year in 2022 and could be primed for strong…

Read more »

An engineer works at a hydroelectric power station, which creates renewable energy.
Energy Stocks

Why Algonquin Power & Utilities Stock Slid 49.3% Last Year

| Tony Dong, MSc, CETF®

Here's why shares of AQN fell hard last year.

Read more »

Energy Stocks

Is CNQ Stock a Buy in January 2023?

| Andrew Walker

CNQ stock is down from the 2022 high. Is it time to buy?

Read more »

Energy Stocks

Worried About a Recession? 3 TSX Giants to Outpace the Market

| Aditya Raghunath

Recession-resistant TSX stocks such as Fortis and Hydro One are well poised to deliver outsized returns to shareholders in 2023.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

The Best Energy Dividend Stock for a Decade of Passive Income

| Aditya Raghunath

Canadian Natural Resources is a top TSX stock that has delivered stellar gains to long-term investors. Let's see why CNQ…

Read more »

oil and gas pipeline
Energy Stocks

Enbridge Is a High-Yielding Canadian Dividend Stock to Buy Now and Own Forever

| Adam Othman

Consider adding Enbridge stock to your portfolio, as it still trades below its all-time highs to capture its high-yielding dividend…

Read more »

Dividend Stocks

3 Growth Stocks You Can Buy Right Now with Less Than $100

| Christopher Liew, CFA

Capital of less than $100 is enough to buy one of these three promising growth stocks that don't belong to…

Read more »

Energy Stocks

2 Energy Stocks You Can Buy Right Now to Play The EV Boom

| Adam Othman

Add these two Canadian renewable energy stocks to capitalize on the growing EV popularity.

Read more »

Recent Energy Stocks News

Energy Stocks

3 Top Mid-Cap Stocks to Lock In Your 1st Million

| Brian Pacampara, CFA

This trio of mid-cap stocks, including Cameco Corporation (TSX:CCO)(NYSE:CCJ), could provide the risk/reward balance you need.

Read more »

Dividend Stocks

2 Top Energy Stocks Yielding +4% to Buy Today and Hold Forever

| Matt Smith

Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) and Enbridge Inc. (TSX:ENB)(NYSE:ENB) are attractively valued, making now the time to buy.

Read more »

Dividend Stocks

2 Top Energy Stocks to Buy Despite Weaker Crude

| Matt Smith

Get ready for the next oil rally by investing in Suncor Energy Inc. (TSX:SU)(NYSE:SU) and Whitecap Resources Inc. (TSX:WCP).

Read more »

Energy Stocks

Baytex Energy (TSX:BTE): Is the Stock a Buy on the Latest Dip?

| Andrew Walker

Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) is attracting contrarian interest. Should you buy the stock on the current pullback?

Read more »

Dividend Stocks

TFSA Users: This Exciting Stock Just Hit a Flashing Buy Signal

| Christopher Liew, CFA

TFSA investors should watch Tourmaline Oil Corp. (TSX:TOU) closely. The energy stock could be the next dividend rock star if…

Read more »

Dividend Stocks

2 Dividend Stocks Not to Buy in a Down Market

| Debra Ray

Canadian investors should avoid low-growth oil stocks like Encana Corp (TSX:ECA)(NYSE:ECA) and instead look at bank stocks.

Read more »

Dividend Stocks

TFSA Investors: This Is the Worst Mistake You Can Make

| Daniel Da Costa

TFSA contribution room is one of the best tools investors have to help build their nest eggs by investing in…

Read more »

Dividend Stocks

Should You Buy Enbridge (TSX:ENB) or Fortis (TSX:FTS) Stock to Ride Out a Recession?

| Andrew Walker

Enbridge Inc. (TSX:ENB)(NYSE:ENB) and Fortis Inc. (TSX:FTS)(NYSE:FTS) are popular dividend stocks for defensive investors. Is one a better buy today?

Read more »

Dividend Stocks

2 Top Dividend Stocks Worth Buying in 2020 and Beyond

| Mat Litalien, MBA

Midstream Canadian Dividend Aristocrats such as Pembina Pipeline Corp (TSX:PPL)(NYSE:PBA) can help investors build significant wealth.

Read more »

Energy Stocks

Here’s Why These 2 Popular Stocks Pulled Back This Summer

| Victoria Hetherington

Lightspeed POS Inc. (TSX:LSPD) saw a slowdown in momentum towards the end of summer, along with a big name in…

Read more »

Energy Stocks

RRSP Investors: Should Royal Bank of Canada (TSX:RY) or Suncor Energy (TSX:SU) Stock Be on Your Buy List?

| Andrew Walker

Suncor Energy (TSX:SU) (NYSE:SU) and Royal Bank of Canada (TSX:RY) (NYSE:RY) are both industry leaders. Is one a better buy…

Read more »

Energy Stocks

3 Retirement Mistakes That Are Killing Your Portfolio

| Ryan Vanzo

What can stocks like Enbridge Inc (TSX:ENB)(NYSE:ENB) teach us about retirement investing? Discover the top three mistakes that are holding…

Read more »

Energy Stocks

2020 Is Nearly Here: How to Invest for the Coming Decade

| Ryan Vanzo

Now is the best time to understand what's working in the market and what's not. Stocks like Shopify Inc (TSX:SHOP)(NYSE:SHOP)…

Read more »

Dividend Stocks

RRSP Investing 101: 3 Definitive Tips and Tricks

| Christopher Liew, CFA

In RRSP investing, you must be familiar with the salient features to make it rewarding. Be sure to invest in…

Read more »

Dividend Stocks

3 High-Yield Dividend Stocks to Hold for 100 Years

| Christopher Liew, CFA

Bank of Montreal (TSX:BMO)(NYSE:BMO), Canadian Utilities Limited (TSX:CU), and Enbridge Inc. (TSX:ENB)(NYSE:ENB) are not prominent because of high dividends. You…

Read more »

Dividend Stocks

Baby Boomers: Master the CPP to Max Out Your Nest Egg

| Christopher Liew, CFA

Aside from mastering the CPP, baby boomers can set up a supplementary retirement fund by investing in CPP stocks like…

Read more »

Dividend Stocks

Enbridge (TSX:ENB) Stock Is Too Cheap to Ignore: Now’s the Time to Buy!

| Ryan Vanzo

Enbridge Inc. (TSX:ENB)(NYSE:ENB) is the perfect stock for 2020, yet its valuation is a bargain. Find out why now is…

Read more »

Dividend Stocks

Canadian Natural Resources (TSX:CNQ): A Top Energy Stock to Buy and Forget

| Karen Thomas, MSc, CFA

Canadian Natural Resources Ltd. (TSX:CNQ) (NYSE:CNQ) is an undervalued energy stock to buy as CNQ drives tremendous shareholder value today…

Read more »

Dividend Stocks

2 Utility Stocks That Can Survive the Next Depression

| Ryan Vanzo

Utility stocks have the ability to weather even the worst bear markets. Find out how regulated power stocks like Hydro…

Read more »

Dividend Stocks

2 Bullet-Proof Stocks You’ll Want to Own

| Debra Ray

Atlantic Power Corp (TSX:ATP)(NYSE:AT) and AltaGas Canada Inc (TSX:ACI) are set to fly 1,000% over the next two decades on…

Read more »

Energy Stocks

Baytex Energy (TSX:BTE) Has More Than 50% Upside!

| Karen Thomas, MSc, CFA

Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) is benefiting from diversification and exposure to strong oil prices, resulting in a continued reduction in…

Read more »

Dividend Stocks

2 Dividend Stocks Paying Yields Over 5% That Should Be in Every Canadian Retiree’s RRSP

| Jason Phillips

Two dividend stocks to help retirees bulletproof their portfolios, including Brookfield Property Partners LP (TSX:BPY.UN)(NASDAQ:BPY) and a renewable energy company…

Read more »

Dividend Stocks

TC Energy (TSX:TRP): The Number 1 Dividend Stock to Buy to Safely Make You Rich

| Karen Thomas, MSc, CFA

TC Energy Corp. (TSX:TRP)(NYSE:TRP) is a safe and defensive dividend stock that offers investors a 4.4% dividend yield, and an…

Read more »

Dividend Stocks

Which of These 2 Energy Stocks Is Right for You?

| Jason Phillips

The market is rich for oil and gas marketing and refining companies right now. But do you buy Cenovus Energy…

Read more »

Dividend Stocks

Warning: These 3 Great Dividends Are in Danger

| Nelson Smith

If you own Vermilion Energy Inc. (TSX:VET)(NYSE:VET) or Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR) just for their generous dividends, then you gotta…

Read more »

Dividend Stocks

7 Reasons to Buy Suncor (TSX:SU) Stock and Never Sell

| Christopher Liew, CFA

The qualities of Suncor Energy Inc. (TSX:SU)(NYSE:SU) as a high-grade investment can be summed up with just seven reasons. When…

Read more »

Dividend Stocks

Altagas Ltd. (TSX:ALA): A Top Dividend Stock That Remains Oversold Today

| Karen Thomas, MSc, CFA

Altagas Ltd. (TSX:ALA) offers investors a more than 5% dividend yield, a stable cash flow profile, and upside from its…

Read more »

Dividend Stocks

2 Attractive Canadian Dividend Stocks to Start Your TFSA Retirement Portfolio

| Karen Thomas, MSc, CFA

Yielding 8.4% and 6.82% respectively, Freehold Royalties Ltd. (TSX:FRU) and Northwest Healthcare Properties REIT (TSX:NWH.UN) are great additions for TFSA…

Read more »

Dividend Stocks

An Oversold Energy Stock to Buy Now

| Karen Thomas, MSc, CFA

Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) has become a cash flow machine with a 15% free cash flow yield and an oversold…

Read more »

Energy Stocks

Buy This 1 Stock to Profit From Climate Change!

| Chen Liu

Climate change is inevitable, so beef up your TFSA or RRSP with a renewable energy stock such as Pattern Energy…

Read more »

Dividend Stocks

TFSA Investors: Buy This Stock If You Love Regular Dividend Income Flows

| Aditya Raghunath

Why TC Energy Corp. (TSX:TRP)(NYSE:TRP) is a good recession-proof investment for long-term investors.

Read more »

Dividend Stocks

3 Energy Stocks to Avoid at All Costs in 2020

| Ryan Vanzo

Stocks like Imperial Oil Ltd. (TSX:IMO)(NYSEMKT:IMO) and Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) used to be winning investments, but long-term, they're…

Read more »

Dividend Stocks

These Stocks Can Survive the 2020 Recession

| Ryan Vanzo

A recession doesn't have to kill your portfolio. Find out how some companies, like Brookfield Infrastructure Partners L.P. (TSX:BIP.UN), can…

Read more »

Dividend Stocks

TFSA Investors: 2 Top Dividend Stocks That Look Oversold Right Now

| Andrew Walker

Here's why Bank of Montreal (TSX:BMO)(NYSE:BMO) and a top energy infrastructure stock deserve to be on your radar.

Read more »

Energy Stocks

1 Undervalued Energy Dividend Stock to Buy and Hold!

| Robert Flynn

Total Energy Services Inc. (TSX:TOT) is trading at a 30% discount and has the dividends and stability to attract savvy…

Read more »

Energy Stocks

RRSP Investors: Should You Buy Suncor Energy (TSX:SU) Stock Today?

| Andrew Walker

Suncor Energy Inc. (TSX:SU)(NYSE:SU) appears cheap today. Is the stock a smart RRSP pick?

Read more »

Dividend Stocks

Oil Investors: Don’t Make This Giant Mistake in 2020

| Ryan Vanzo

Want to invest in oil stocks without losing your shirt? Find out whether you should buy or avoid stocks like…

Read more »

Dividend Stocks

Top Energy Stocks to Buy in October for Your TFSA

| Haris Anwar

Here is why Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) is one top stocks to buy for your TFSA.

Read more »

Dividend Stocks

Cenovus Energy (TSX:CVE) Turns Into a Dividend-Growth Stock: Time to Buy?

| Brian Paradza, CFA

Will Cenovus Energy Inc.'s (TSX:CVE)(NYSE:CVE) latest dividend increase turn investors' heads and make the stock a buy today?

Read more »

Dividend Stocks

Smart Investors Can Retire Happy With This Powerhouse Clean Energy Stock

| Rahim Bhayani

Northland Power Inc. (TSX:NPI), one of the best developers of clean energy infrastructure is poised for significant growth as new…

Read more »