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

The Motley Fool
Energy Stocks

3 Catalysts That Will Support Higher Oil Prices

| Matt Smith

There are a range of emerging catalysts that have the potential to drive oil prices higher, making Crescent Point Energy…

Read more »

The Motley Fool
Energy Stocks

Does Suncor Energy Inc. Deserve to Be a Top Energy Pick?

| Andrew Walker

Suncor Energy Inc. (TSX:SU)(NYSE:SU) isn't cheap, but there's a good reason for that.

Read more »

The Motley Fool
Energy Stocks

Imperial Oil Limited Turns to Technology to Survive the Oil Downturn

| Matt DiLallo

Imperial Oil Limited (TSX:IMO)(NYSE:IMO) sees technology as the key to improve production and returns from the oil sands.

Read more »

The Motley Fool
Dividend Stocks

Should Investors Buy Inter Pipeline Ltd. for the 6% Yield?

| Andrew Walker

Inter Pipeline Ltd. (TSX:IPL) looks attractive. Let's see if it deserves to be in your portfolio.

Read more »

The Motley Fool
Energy Stocks

3 Reasons Why TransAlta Corporation Could Be a Huge Winner

| Nelson Smith

TransAlta Corporation (TSX:TA)(NYSE:TAC) might be one of the most attractive stocks on the TSX for contrarian investors. Here's why this…

Read more »

The Motley Fool
Dividend Stocks

Crescent Point Energy Corp. Can Maintain its Dividend at $55 Oil

| Benjamin Sinclair

Thinking of adding Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) to your dividend portfolio? You should read this first.

Read more »

The Motley Fool
Energy Stocks

Should Investors Buy Enbridge Inc.?

| Jacob Donnelly

Because of its wide moat, lucrative business model, and growing yield, I believe investors should consider buying Enbridge Inc. (TSX:ENB)(NYSE:ENB).

Read more »

The Motley Fool
Energy Stocks

These 5 Oil Sands Projects Will Add 600,000 b/d to an Oversupplied Market

| Benjamin Sinclair

Suncor Energy Inc. (TSX:SU)(NYSE:SU), Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ), Imperial Oil Limited (TSX:IMO)(NYSE:IMO), and others are pressing ahead with their…

Read more »

The Motley Fool
Energy Stocks

Is Crescent Point Energy Corp. a Smart Contrarian Bet?

| Andrew Walker

Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) looks cheap, but risks remain.

Read more »

The Motley Fool
Dividend Stocks

3 High-Yielding Energy Stocks I’d Buy With an Extra $5,000

| Joseph Solitro

Looking for a high-yielding energy stock? If so, Gibson Energy Inc. (TSX:GEI), Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA), and Emera Inc. (TSX:EMA)…

Read more »

The Motley Fool
Energy Stocks

Don’t Bet on Natural Gas Companies Like Encana Corporation or Peyto Exploration & Development Corp.

| Ryan Vanzo

Oversupply and tepid demand means natural gas prices should stay low, hurting companies like Encana Corporation (TSX:ECA)(NYSE:ECA) and Peyto Exploration…

Read more »

The Motley Fool
Energy Stocks

Will Baytex Energy Corp. Get Taken Out?

| Andrew Walker

Here's why Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) might not be around this time next year.

Read more »

The Motley Fool
Energy Stocks

Is Canadian Natural Resources Ltd. About to Make a Big Acquisition?

| Matt DiLallo

Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) is rumoured to be one of the bidders for ConocoPhillips's (NYSE:COP) natural gas assets in…

Read more »

The Motley Fool
Dividend Stocks

More Layoffs at TransCanada Corporation: Should Shareholders Be Alarmed?

| Kay Ng

More layoffs are coming to TransCanada Corporation (TSX:TRP)(NYSE:TRP). Should shareholders bail now or buy more shares for income and long-term…

Read more »

The Motley Fool
Energy Stocks

Could Encana Corporation Double in the Next 12 Months?

| Andrew Walker

Encana Corporation (TSX:ECA)(NYSE:ECA) looks cheap, but risks still remain.

Read more »

The Motley Fool
Dividend Stocks

Drilling Services Firms Are Feeling the Pain of Weak Oil Prices

| Doug Watt

Trican Well Service Ltd. (TSX:TCW) and Calfrac Well Services Ltd. (TSX:CFW) take drastic measures to deal with low oil prices…

Read more »

The Motley Fool
Energy Stocks

Is Penn West Petroleum Ltd. Really Worth Nearly $3 Per Share?

| Benjamin Sinclair

Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE) would be worth nearly $3 per share using the same multiple as its latest asset…

Read more »

The Motley Fool
Energy Stocks

Penn West Petroleum Ltd.: Will This Troubled Company Be Able to Save Itself?

| Benjamin Sinclair

Bankruptcy looms for Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE). What are the company's chances of survival?

Read more »

The Motley Fool
Energy Stocks

3 Companies That Suncor Energy Inc. or Imperial Oil Limited Might Buy Out

| Benjamin Sinclair

Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE), Canadian Oil Sands Ltd. (TSX:COS), and MEG Energy Inc. (TSX:MEG) must look tempting to Suncor Energy…

Read more »

The Motley Fool
Energy Stocks

Crescent Point Energy Corp.: Should You Buy the Latest Pullback?

| Andrew Walker

Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) looks attractive, but risks remain.

Read more »

The Motley Fool
Energy Stocks

Stick a Fork in Westport Innovations Inc., it’s Done

| Nelson Smith

Westport Innovations Inc. (TSX:WPT)(NASDAQ:WPRT) needs to turn things around quickly, or else the future could involve bankruptcy.

Read more »

The Motley Fool
Energy Stocks

TransCanada Corporation: 3 Reasons Hillary Clinton Opposes Keystone XL

| Benjamin Sinclair

TransCanada Corporation (TSX:TRP)(NYSE:TRP) shouldn't be surprised the Democratic front-runner is opposed to the controversial project.

Read more »

The Motley Fool
Energy Stocks

Investors: Suncor Energy Inc. Is the Oil Company to Buy

| Demetris Afxentiou

As oil prices tumble, Suncor Energy Inc. (TSX:SU)(NYSE:SU) remains a solid option for investors in an otherwise bleak industry.

Read more »

The Motley Fool
Energy Stocks

Does Penn West Petroleum Ltd. Have Enough Breathing Room Now?

| Matt DiLallo

Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE) recently brought in nearly $200 million from a non-core asset sale.

Read more »

The Motley Fool
Energy Stocks

Is Encana Corporation or Cenovus Energy Inc. a Better Oil Bet?

| Andrew Walker

Encana Corporation (TSX:ECA)(NYSE:ECA) and Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) used to be one big company. Let's see which one is likely…

Read more »

The Motley Fool
Energy Stocks

Should Investors Consider Acquiring TransCanada Corporation?

| Jacob Donnelly

Because of its consistent income and growing dividend, investors should buy shares of TransCanada Corporation (TSX:TRP)(NYSE:TRP).

Read more »

The Motley Fool
Energy Stocks

3 Reasons Crescent Point Energy Corp. Will Outlast American Oil Producers

| Benjamin Sinclair

Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) has some nice advantages over its American counterparts.

Read more »

The Motley Fool
Energy Stocks

How Investors Should React to Suncor Energy Inc.’s Big Purchase

| Benjamin Sinclair

Suncor Energy Inc. (TSX:SU)(NYSE:SU) just bought an additional stake in Fort Hills. What does this mean for Suncor and Teck…

Read more »

The Motley Fool
Energy Stocks

Will Baytex Energy Corp. Survive the Current Crisis?

| Ryan Vanzo

An investment in Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) is simply a bet on whether or not it survives.

Read more »

The Motley Fool
Energy Stocks

Suncor Energy Inc. Is Itching to Go Shopping

| Matt DiLallo

Suncor Energy Inc.’s (TSX:SU)(NYSE:SU) CEO says low oil prices could lead to a fire sale in the oil patch.

Read more »

The Motley Fool
Dividend Stocks

Like Big Yield? Then Choose These 3 Stocks Over Crescent Point Energy Corp.

| Nelson Smith

For consistent dividends, avoid Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) and load up on Boston Pizza Royalties Income Fund (TSX:BPF.UN), Cominar…

Read more »

The Motley Fool
Energy Stocks

What Is Husky Energy Inc. Going to Do Now?

| Matt DiLallo

Husky Energy Inc. (TSX:HSE) won’t be getting a drilling rig after its partner canceled the contract.

Read more »

The Motley Fool
Dividend Stocks

3 Energy Stocks You Can Bet on for a Comeback

| Kay Ng

If you believe in the long-term demand for oil, you don’t want to miss these stocks: TransCanada Corporation (TSX:TRP)(NYSE:TRP), Suncor…

Read more »

The Motley Fool
Energy Stocks

3 Energy Stocks With Huge Potential Upside

| Nelson Smith

Looking for a huge home run in the energy sector? Then check out Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE), Pengrowth Energy…

Read more »

The Motley Fool
Dividend Stocks

Which Utility Stock Is the Better Buy Today: Fortis Inc. or Emera Inc.?

| Joseph Solitro

Should you be a long-term buyer of Fortis Inc. (TSX:FTS) or Emera Inc. (TSX:EMA) today?

Read more »

The Motley Fool
Energy Stocks

Will Baytex Energy Corp. Survive the Oil Rout?

| Andrew Walker

Here's what investors need to know about Baytex Energy Corp. (TSX:BTE)(NYSE:BTE).

Read more »

The Motley Fool
Dividend Stocks

3 Reasons Why Suncor Energy Inc. Is Worth Buying Despite Weak Oil Prices

| Doug Watt

Suncor Energy Inc. (TSX:SU)(NYSE:SU) is a rare breed these days. It's an oil company whose stock is attractive.

Read more »

The Motley Fool
Dividend Stocks

Why I’m Staying Far Away From Just Energy Group Inc.

| Nelson Smith

There's a lot to not like about Just Energy Group Inc. (TSX:JE)(NYSE:JE). Here's why I'll never buy, no matter how…

Read more »

The Motley Fool
Dividend Stocks

Is Crescent Point Energy Corp.’s New 7% Dividend Safe?

| Nelson Smith

Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) recently cut its monthly payout from $0.23 to $0.10 per share. Why investors should still…

Read more »

The Motley Fool
Energy Stocks

Why Imperial Oil Limited Is a Solid Bet on a Rebound in Crude

| Matt Smith

Integrated energy major Imperial Oil Limited (TSX:IMO)(NYSE:IMO) continues to remain profitable despite the difficult operating environment, making it one of…

Read more »