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

Why Enbridge Inc. (TSX:ENB) Is a Buy Despite “Ugly” Capital Structure

| Joey Frenette

Why Enbridge Inc. (TSX:ENB)(NYSE:ENB) still looks good in spite of its unfavourable financial structure.

Read more »

The Motley Fool
Energy Stocks

Suncor Energy Inc. (TSX:SU) Looks Overvalued and Ripe for a Pullback: Buy This Oil Sands Stock Instead!

| Joey Frenette

Suncor Energy Inc. (TSX:SU)(NYSE:SU) isn't looking too attractive at these levels. Here's a better oil play to profit from.

Read more »

Dividend Stocks

Dividend Investors: Should You Buy BCE Inc. (TSX:BCE) or Hydro One Ltd. (TSX:H)?

| Andrew Walker

Are BCE Inc. (TSX:BCE) (NYAE:BCE) and Hydro One Ltd. (TSX:H) attractive contrarian bets today?

Read more »

Energy Stocks

Enbridge Inc. (TSX:ENB) Stock Is Soaring: Is Now the Time to Buy?

| David Jagielski

Investors have been very bullish on Enbridge Inc (TSX:ENB)(NYSE:ENB) lately.

Read more »

Dividend Stocks

Why Canada’s Pipelines May Be the Best Investment in the Entire Oil Patch!

| Ryan Goldsman

As the price of oil continues to head higher, investors need to back up the truck on shares of Pembina…

Read more »

Dividend Stocks

Should You Buy Canadian Imperial Bank of Commerce (TSX:CM) or Imperial Oil Ltd. (TSX:IMO)?

| Andrew Walker

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) and Imperial Oil Ltd. (TSX:IMO)(NYSE:IMO) have histories dating back to the 1800s. Is one…

Read more »

Energy Stocks

Why This Renewable Energy Investment Is Huge

| Demetris Afxentiou

Innergex Renewable Energy Inc. (TSX:INE) continues to offer investors a growing dividend and impressive growth prospects that are slated to…

Read more »

Energy Stocks

Is Suncor Energy Inc. (TSX: SU) or MEG Energy Corp. (TSX:MEG) a Better Stock Pick Today?

| Andrew Walker

Suncor Energy Inc. (TSX: SU) (NYSE:SU) and MEG Energy Corp. (TSX:MEG) are two of Canada's oil sands producers. Which one…

Read more »

gas
Dividend Stocks

Why AltaGas Ltd.’s (TSX:ALA) Stock Has Bounced 20% off its 52-Week Low

| Mat Litalien, MBA

Altagas Ltd.'s (TSX:ALA) stock has bounced 20% of its 52-week lows thanks in large part to closing its WGL acquisition.

Read more »

hydroelectricity facility
Energy Stocks

The Pros and Cons of Owning Hydro One Ltd. (TSX:H) Stock

| Will Ashworth

Doug Ford’s ouster of Hydro One Ltd. (TSX:H) CEO Mayo Schmidt might look good politically but it’s seriously hurt the…

Read more »

oil, petroleum, refinery
Energy Stocks

4 Oil and Gas Stocks to Monitor in August

| Ambrose O'Callaghan

Oil prices have retreated in recent weeks, but Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) and other energy stocks could still have room…

Read more »

The Motley Fool
Energy Stocks

Will a Trade War Bring an End to Higher Oil?

| Matt Smith

Even if oil weakens further, Suncor Energy Inc. (TSX:SU)(NYSE:SU) is an attractive investment.

Read more »

Energy Stocks

Earnings Alert: 5 Top Stocks to Watch This Week

| Neha Chamaria

Why earnings could hit top stocks like Suncor Energy Inc. (TSX:SU)(NYSE:SU) and Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) this week.

Read more »

Dividend Stocks

3 Stocks to Watch This Week

| Mat Litalien, MBA

Earnings season is in full swing. Suncor Energy Inc. (TSX:SU)(NYSE:SU) is one of three companies that can see its share…

Read more »

Energy Stocks

Invest in These 3 Oil Services Stocks for Massive Upside

| Karen Thomas, MSc, CFA

As the price of oil holds at just below $70, energy services stocks such as Precision Drilling Corp. (TSX:PD)(NYSE:PDS) and…

Read more »

Dividend Stocks

2 Blue Chips With Higher Than Average Growth Rates

| Mat Litalien, MBA

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and Suncor Energy Inc. (TSX:SU)(NYSE:SU) have outperformed their peers and are expected to post higher than average…

Read more »

stock market index
Energy Stocks

5 Reasons to Stay Bullish and Love the TSX

| Victoria Hetherington

Stocks like STEP Energy Services Ltd. (TSX:STEP) could see some added upside if the TSX rallies this year. Could talk…

Read more »

The Motley Fool
Energy Stocks

Baytex Energy Corp. (TSX:BTE): Should This Oil Stock Be on Your Buy List?

| Andrew Walker

Does the upcoming merger make Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) attractive today?

Read more »

Dividend Stocks

After the Run Up, Is Enbridge Inc. (TSX:ENB) a Buy at Today’s Price?

| Kris Knutson

After a huge rise in the share price, Enbridge Inc. (TSX:ENB)(NYSE:ENB) has strengthened its balance sheet significantly through asset sales…

Read more »

Dividend Stocks

2 Stocks to Buy With Dividends Yielding More Than 6%

| Haris Anwar

AltaGas Ltd. (TSX:ALA) is one of two high-yielding dividend stocks that look attractive after a major pullback.

Read more »

The Motley Fool
Dividend Stocks

Better Buy: Canopy Growth Corp. (TSX:WEED) vs. Canadian Natural Resources Ltd. (TSX:CNQ) and the Energy Sector

| Karen Thomas, MSc, CFA

Canopy Growth Corp. (TSX:WEED)(NYSE:CGC) appears overvalued relative to earnings, while energy stock Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) is trading at…

Read more »

Dividend Stocks

There’s More Upside for These 2 Energy Stocks

| Kay Ng

Higher oil prices aren’t fully reflected in Vermilion Energy Inc. (TSX:VET)(NYSE:VET) and another energy stock.

Read more »

oil, petroleum, refinery
Energy Stocks

Have Latest Developments Made the Outlook for Oil More Pessimistic?

| Matt Smith

Oil's latest weakness shouldn't deter investors from considering Baytex Energy Corp. (TSX:BTE)(NYSE:BTE).

Read more »

Dividend Stocks

Enbridge Inc. (TSX:ENB) vs. Suncor Energy Inc. (TSX:SU): Which Stock Is a Better Buy?

| Haris Anwar

Enbridge Inc. (TSX:ENB)(NYSE:ENB) and Suncor Energy Inc. (TSX:SU(NYSE:SU) are attractive dividend stocks to hold in your income portfolio. Let's find…

Read more »

gas
Dividend Stocks

Dividend Investors: Should You Buy AltaGas Ltd. (TSX:ALA) Today?

| Andrew Walker

AltaGas Ltd. (TSX:ALA) has bounced off the 2018 low. Are big gains on the way?

Read more »

The Motley Fool
Energy Stocks

Imperial Oil Ltd. (TSX:IMO) vs. Cenovus Energy Inc. (TSX:CVE): Which Stock Is a Better Bet?

| Andrew Walker

Imperial Oil Ltd. (TSX:IMO)(NYSE:IMO) and Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) have enjoyed a nice bounce off the March lows. Is one…

Read more »

Dividend Stocks

The 2 Healthiest Energy Stocks in Canada to Buy Now

| Victoria Hetherington

Enbridge Income Fund Holdings Inc. (TSX:ENF) is one of the strongest stocks on the TSX today. Which other Canadian energy…

Read more »

Energy Stocks

Will Peak Oil Demand Arrive Sooner than Expected?

| Matt Smith

Peak oil demand has the potential to make Suncor Energy Inc.'s (TSX:SU)(NYSE:SU) oil sands assets uneconomic to operate.

Read more »

oil, petroleum, refinery
Dividend Stocks

Which Canadian Energy Stock Is a Buy? STEP (TSX:STEP) or Enerflex (TSX:EFX)?

| Victoria Hetherington

Enerflex Ltd. (TSX:EFX) is one of the healthiest energy stocks on the TSX. But is STEP Energy Services Ltd. (TSX:STEP)…

Read more »

The Motley Fool
Dividend Stocks

Top Dividend Stocks to Launch Your TFSA

| Haris Anwar

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is among the top dividend stocks to help build your TFSA wealth.

Read more »

Dividend Stocks

2 Stocks to Buy Despite Trading Near All-Time Highs

| Andrew Walker

Here's why Telus Corporation (TSX:T)(NYSE:TU) and one other top Canadian company should be on your radar.

Read more »

Energy Stocks

Can This Resurrected Energy Company Ever Reward Investors?

| Matt Smith

Frontera Energy Corp. (TSX:FEC) appears to have put the worst behind it.

Read more »

Dividend Stocks

Is This 6.5% Dividend Yield Canada’s Top Upstream Energy Stock?

| Matt Smith

Get ready for oil's next leg up by investing in Bonterra Energy Corp. (TSX:BNE).

Read more »

Energy Stocks

Why Is Oil Inching Lower Yet Again?

| Matt Smith

Despite oil's latest pullback Cresent Point Energy Corp. (TSX:CPG)(NYSE:CPG) remains an attractive means of playing higher oil.

Read more »

The Motley Fool
Dividend Stocks

3 Dividend Stocks Hiding in the Bargain Basement

| Victoria Hetherington

Leon’s Furniture Ltd. (TSX:LNF) and two other unloved dividend stocks get combed over for multiples and value. Are any of…

Read more »

The Motley Fool
Dividend Stocks

2 Top Energy Stocks to Buy When They’re Selling Cheap

| Haris Anwar

Emera Inc. (TSX:EMA) is one of the top energy stocks to buy after a recent pullback due to its growth…

Read more »

The Motley Fool
Energy Stocks

Hydro One Ltd. (TSX:H) Stock Sinks After Ford Ousts CEO: Should You Buy the Dip?

| Ambrose O'Callaghan

Hydro One Ltd. (TSX:H) is now tasked with finding new leadership as political turmoil has ravaged the stock price.

Read more »

Dividend Stocks

How Much Upside Does Birchcliff Energy Ltd. (TSX:BIR) Stock Have?

| Kay Ng

Do you want to invest in Birchcliff Energy Ltd. (TSX:BIR) stock for the short term or long term?

Read more »

Dividend Stocks

3 Stocks to Watch This Week

| Mat Litalien, MBA

Earnings season is ramping up, and companies such as Canadian Pacific Railway Limited (TSX:CP)(NYSE:CP) are poised to make a move…

Read more »

The Motley Fool
Dividend Stocks

5 Top Canadian Blue-Chip Stocks to Buy and Hold

| Stephanie Bedard-Chateauneuf, MBA

You can benefit from stock appreciation and regular dividend income by buying stocks like Suncor Energy Inc. (TSX:SU)(NYSE:SU) and Enbridge…

Read more »