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

Dividend Stocks

Worried About a Bear Market? These 3 Defensive Stocks Are Bear Repellent

| Chris MacDonald

Why investors ought to consider Fortis Inc. (TSX:FTS)(NYSE:FTS), Canadian Tire Corporation (TSX:CTC.A), and Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) with a bear market…

Read more »

The Motley Fool
Dividend Stocks

Value Investors: This Large-Cap E&P Oil and Gas Stock Is Deeply Oversold and Could Potentially Double in Value

| Jason Phillips

“One man’s junk is another man’s treasure,” goes the expression… Make no mistake – you would have wanted nothing to…

Read more »

Dividend Stocks

TFSA Investors: Want to Outperform the TSX Index? Avoid These 2 Stocks

| Jason Phillips

The market is full of winners and losers. But you'll never regret avoiding the stocks of companies like Corus Entertainment…

Read more »

Dividend Stocks

1 Dividend-Paying Company That May Be Poised for Take Off

| Kris Knutson

After some rough years, Badger Daylighting Ltd (TSX:BAD) has a strong US business segment that has been producing significant revenue…

Read more »

Dividend Stocks

Why I Think TransCanada (TSX:TRP) Is a Better Investment Than Enbridge (TSX:ENB) Right Now

| Jason Phillips

Shares in Enbridge Inc (TSX:ENB)(NYSE:ENB) are up more than 20% since April. Meanwhile, there's another major Canadian pipeline company that…

Read more »

wind generation facility
Dividend Stocks

Now Is the Time to Acquire This Renewable Energy Utility Yielding 4%

| Matt Smith

Boost income and growth by investing in Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN).

Read more »

Dividend Stocks

Will You Buy This Underpriced Stock for a Nice Dividend?

| Kay Ng

AltaGas Ltd. (TSX:ALA) offers attractive total returns and an awesome dividend.

Read more »

The Motley Fool
Dividend Stocks

Increase Your Retirement Income With These 2 Dividend Stocks

| Kay Ng

Need an income boost? Get safe 5-6% dividend yields from Enbridge Inc. (TSX:ENB)(NYSE:ENB) and another stock now.

Read more »

The Motley Fool
Dividend Stocks

A High-Yielding Dividend Stock That’s on Sale

| Haris Anwar

AltaGas Ltd. (TSX:ALA) is a high-yielding dividend stock selling at a substantial discount and offering good value to long-term investors.

Read more »

Energy Stocks

Will Oil Soar Higher?

| Matt Smith

Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) is an attractive means of playing higher oil.

Read more »

Compass pointing towards 'best price'
Energy Stocks

Is Husky Energy Inc. (TSX:HSE) or Suncor Energy Inc. (TSX:SU) Stock a Buy?

| Andrew Walker

Husky Energy (TSX:HSE) and Suncor Energy (TSX:SU) (NYSE:SU) are generating impressive cash flow. Is one a better bet today?

Read more »

electricity transmission
Dividend Stocks

Looking for Income? Check Out This Beaten-Down Utility With a 5% Yield

| Kris Knutson

Investors looking for steady, growing income should check out Canadian Utilities Ltd (TSX:CU), a company with decades of dividend growth…

Read more »

The Motley Fool
Dividend Stocks

2 Top Dividend Stocks to Buy Today and Hold for Life

| Haris Anwar

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is one of two top dividend stocks that you can buy today and hold on to for…

Read more »

Dividend Stocks

AltaGas Ltd. (TSX:ALA) and Enbridge Inc. (TSX:ENB): 2 Top High-Yield Dividend Stocks to Ramp Up Your Retirement Income

| Karen Thomas, MSc, CFA

With dividend yields of 8.84% and 5.93%, respectively, AltaGas Ltd. (TSX:ALA) and Enbridge Inc. (TSX:ENB)(NYSE:ENB) are great additions to your…

Read more »

Dividend Stocks

Why Enbridge Inc. (TSX:ENB) Might Be About to Take Off!

| David Jagielski

Enbridge Inc (TSX:ENB)(NYSE:ENB) stock has been down for far too long and it's overdue for a big recovery.

Read more »

Dividend Stocks

3 Value Stocks With Safe +6% Yields

| Kay Ng

Income investors should consider AltaGas Ltd. (TSX:ALA) and two other stocks for total returns of about 8-12%.

Read more »

Energy Stocks

Adding to Your RRSP Today: Enbridge Inc. (TSX:ENB) or Canadian Imperial Bank of Commerce (TSX:CM) Stock?

| Ambrose O'Callaghan

Workers recently on the path of self-directed investing will need to make choices to bet on stocks like Enbridge (TSX:ENB)(NYSE:ENB)…

Read more »

Dividend Stocks

1 Key Reason Why This Oil Stock Is Poised to Soar

| Matt Smith

Intermediate oil producer Whitecap Resources Inc. (TSX:WCP) is ready to surge in value as its profitability grows.

Read more »

The Motley Fool
Dividend Stocks

1 Top Driller to Play Higher Oil

| Matt Smith

Intermediate oil producer Surge Energy Inc. (TSX;SGY) is poised to soar as its profitability grows.

Read more »

The Motley Fool
Energy Stocks

Should You Buy Canadian Natural Resources Ltd. (TSX:CNQ) Stock Today?

| Andrew Walker

Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) gave investors a huge dividend increase this year. Are more big gains on the way?

Read more »

wind generation facility
Dividend Stocks

Retirees: Can I Interest You in a 6.1% Yield to Go With a Margin of Safety?

| Joey Frenette

Brookfield Renewable Partners L.P. (TSX:BEP.UN)(NYSE:BEP) is a wonderful business to own for the retired. Here's why.

Read more »

The Motley Fool
Dividend Stocks

2 Top Dividend Stocks That TFSA Investors Will Find Selling Cheap

| Haris Anwar

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is one of two top dividend stocks that TFSA investors might find attractive for the…

Read more »

The Motley Fool
Dividend Stocks

3 Top Canadian Oil Stocks to Buy and Hold Forever

| Victoria Hetherington

Suncor Energy Inc. (TSX:SU)(NYSE:SU) and two other top Canadian energy stocks get their market fundamentals combed through. Which is a…

Read more »

The Motley Fool
Energy Stocks

Is Baytex Energy Corp. (TSX:BTE) Stock a Buy After the Merger?

| Andrew Walker

Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) is finally catching a nice tailwind. Are more gains on the way?

Read more »

best, thumbs up
Energy Stocks

5 Years Until Retirement? Here Are the Best Dividend Stocks Available!

| Ryan Goldsman

As many approach their golden years, the best decision that can be made may just be buying into Restaurant Brands…

Read more »

Dividend Stocks

2 Unloved Canadian Energy Stocks for a Contrarian Portfolio

| Andrew Walker

Crescent Point Energy (TSX:CPG) (NYSE:CPG) and another beaten-up player in the Canadian energy patch remain out of favour. Is that…

Read more »

Dividend Stocks

2 Top High-Yield Canadian Stocks for Income Investors

| Andrew Walker

Emera (TSX:EMA) and another utility stock offer above-average yield and growing dividends.

Read more »

Dividend Stocks

Will Baytex Energy Corp. (TSX:BTE) Finally Beat the S&P/TSX Composite Index (TSX:^OSPTX)?

| Karen Thomas, MSc, CFA

Baytex Energy Corp. (TSX:BTE) (NYSE:BTE) merger reduces its debt load and increases its diversification, setting this energy stock up to…

Read more »

hydroelectricity facility
Dividend Stocks

Buy and Forget: Algonquin Power & Utilities Corp. (TSX:AQN)

| Demetris Afxentiou

Algonquin Power & Utilities Corp. (TSX:AQN)(NYSE:AQN) has a significant advantage over its fossil-fuel burning peers that most investors don't realize.

Read more »

Dividend Stocks

Do You Want Growth and Income, Too?

| Kay Ng

Between Northland Power Inc. (TSX:NPI) and its peer, which green utility should you buy?

Read more »

Energy Stocks

This Canadian Oil Stock Could Realistically Double

| Joey Frenette

Why investors should look closely at Cenovus Energy (TSX:CVE)(NYSE:CVE) as a rebound candidate.

Read more »

Dividend Stocks

2 Top Dividend Stocks TFSA Investors Should Buy Right Now

| Haris Anwar

Here is why Canadian National Railway (TSX:CNR)(NYSE:CNI) is one of two top dividend stocks that TFSA investors should consider to build…

Read more »

Energy Stocks

Top Energy Picks for Monthly Income and Upside

| James Watkins-Strand

Stocks such as Peyto Exploration & Development Corp. (TSX:PEY) offer monthly dividends and excellent opportunities for capital appreciation.

Read more »

electricity transmission
Dividend Stocks

Is TransAlta Corp. (TSX:TA) Stock a Contrarian Buy Today?

| Andrew Walker

TransAlta Corporation (TSX:TA)(NYSE:TAC) had a rough run in recent years. Are better days finally on the way?

Read more »

Dividend Stocks

2 Dividend Stocks on Sale That I’d Buy Right Now

| David Jagielski

Just Energy Group Inc (TSX:JE)(NYSE:JE) and this other stock have fallen hard lately.

Read more »

Energy Stocks

3 Cheap Renewable Energy Stocks to Stash in Your Portfolio Today

| Ambrose O'Callaghan

Stocks like Brookfield Renewable Energy (TSX:BEP.UN)(NYSE:BEP) come at a bargain as summer is winding to a close.

Read more »

Dividend Stocks

Are These Energy Stocks Screaming Buys or Value Traps?

| Karen Thomas, MSc, CFA

Peyto Exploration and Development Corp. (TSX:PEY) is an undervalued energy stock that has a 6.8% dividend yield and one of…

Read more »

Dividend Stocks

Is It Time You Bailed on Cenovus Energy (TSX:CVE) Stock? Shares Are Now 18% off July Highs

| Jason Phillips

Cenovus (TSX:CVE)(NYSE:CVE) stock is starting to lose its momentum following a meteoric rise earlier this year. Is time you got…

Read more »

The Motley Fool
Energy Stocks

What Are the Best Stocks to Buy for China Exposure in a Trade War?

| Victoria Hetherington

As the trade war rumbles on, stocks like Alibaba Group Holding Ltd. (USA) (NYSE:BABA) look too expensive. Should domestic investors…

Read more »

The Motley Fool
Dividend Stocks

Investor Beware: This Canadian Market Darling Could Suffer a Correction

| Joey Frenette

Suncor Energy Inc. (TSX:SU)(NYSE:SU) is running hot. Here's why investors should trim profits as valuations are way too rich.

Read more »