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

Should You Power Up Your Portfolio With Canadian Solar Inc.?

| Joseph Solitro

Canadian Solar Inc. (NASDAQ:CSIQ) released first-quarter earnings on May 7 and its stock has reacted by rising over 5%. Will…

Read more »

The Motley Fool
Dividend Stocks

Cenovus Energy Inc.: Should Dividend Investors Buy the Stock?

| Andrew Walker

Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) offers a 5% yield that might just survive.

Read more »

Dividend Stocks

Is Fortis Inc. the Top Utility Stock in the Market Today?

| Joseph Solitro

Fortis Inc. (TSX:FTS) beat first-quarter earnings estimates on May 5 and its stock has reacted by falling over 1.5%. Is…

Read more »

The Motley Fool
Dividend Stocks

Is Now the Prime Time to Buy Crescent Point Energy Corp.?

| Joseph Solitro

Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) released first-quarter earnings on May 7 and its stock has reacted by falling over 1%.…

Read more »

The Motley Fool
Energy Stocks

1 Energy Stock to Buy for Under $5: Pengrowth Energy Corp.

| Matt Smith

There are a number of reasons why Pengrowth Energy Corp. (TSX:PGF)(NYSE:PGH) is fast shaping up as a bargain buy for…

Read more »

The Motley Fool
Energy Stocks

Why 1 of Canada’s Top Portfolio Managers Doesn’t Own Any Big Oil Stocks

| Benjamin Sinclair

Companies such as Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) and Suncor Energy Inc. (TSX:SU)(NYSE:SU) may be popular with investors, but they…

Read more »

The Motley Fool
Energy Stocks

3 Things Cenovus Energy Inc.’s CEO Wants You to Know

| Matt DiLallo

Highlights from Cenovus Energy Inc.’s (TSX:CVE)(NYSE:CVE) first-quarter conference call.

Read more »

The Motley Fool
Energy Stocks

Should You Buy Whitecap Resources Inc. for its 5.3% Yield Today?

| Joseph Solitro

Whitecap Resources Inc. (TSX:WCP) released first-quarter earnings on May 6, and its stock has reacted by making a slight move…

Read more »

The Motley Fool
Dividend Stocks

Is Enbridge Inc. the Top Energy Stock in the TSX 60 to Buy Today?

| Joseph Solitro

Enbridge Inc. (TSX:ENB)(NYSE:ENB) released first-quarter earnings on May 6 and its stock reacted by falling over 2.5%. Should you buy…

Read more »

The Motley Fool
Dividend Stocks

Is it Finally Time to Buy Husky Energy Inc.?

| Joseph Solitro

Husky Energy Inc. (TSX:HSE) released first-quarter earnings on May 6 and its stock has reacted by falling about 1.5%. Is…

Read more »

The Motley Fool
Dividend Stocks

Is TransCanada Corporation Still a Safe Dividend Bet?

| Andrew Walker

Here's what dividend investors need to know before buying TransCanada Corporation (TSX:TRP)(NYSE:TRP).

Read more »

The Motley Fool
Energy Stocks

Why Hedge Fund Manager David Einhorn Says Shale Oil Producers Are Doomed

| Benjamin Sinclair

David Einhorn thinks shale oil producers in the United States are on borrowed time. So, should you buy Canadian producers…

Read more »

The Motley Fool
Dividend Stocks

Is Pembina Pipeline Corp. the Top Pipeline Stock to Buy Today?

| Joseph Solitro

Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA) released first-quarter earnings on May 6 and its stock has reacted by falling about 1%. Is…

Read more »

The Motley Fool
Energy Stocks

After a Big NDP Victory, Does TransCanada Corporation Belong in Your Portfolio?

| Benjamin Sinclair

TransCanada Corporation's (TSX:TRP)(NYSE:TRP) shares sunk after Rachel Notley's victory. Has that created an opportunity?

Read more »

The Motley Fool
Energy Stocks

What Does the NDP Victory in Alberta Mean for the Energy Sector?

| Nelson Smith

Why Alberta's new government is likely bad news for companies in the energy sector such as Penn West Petroleum Ltd.…

Read more »

The Motley Fool
Dividend Stocks

Is Keyera Corp. the Top Natural Gas Stock to Buy Today?

| Joseph Solitro

Keyera Corp. (TSX:KEY) released first-quarter earnings on May 5 and its stock has responded by falling over 3%. Should you…

Read more »

The Motley Fool
Energy Stocks

Buy Pembina Pipeline Corp. Before it’s Too Late

| Ryan Vanzo

Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA) is restructuring into a more attractive business.

Read more »

The Motley Fool
Dividend Stocks

Which of Canada’s Energy Companies Will Be the First to Recover?

| Doug Watt

Suncor Energy Inc. (TSX:SU)(NYSE:SU), Imperial Oil Limited (TSX:IMO)(NYSE:IMO) and Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) all had predictably weak Q1 results. Which…

Read more »

The Motley Fool
Dividend Stocks

Can Investors Count on Arc Resources Ltd. and its 4.9% Dividend?

| Nelson Smith

Arc Resources Ltd. (TSX:ARX) managed to maintain its 4.9% dividend during the worst of the crude crisis, but the dividend…

Read more »

The Motley Fool
Dividend Stocks

Is Baytex Energy Corp. the Top Turnaround Play in the Energy Sector?

| Joseph Solitro

Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) released first-quarter earnings on May 5 and its stock has reacted by rising over 3%. Is…

Read more »

The Motley Fool
Energy Stocks

Is the Worst Over for Canadian Oil Sands Ltd.?

| Adam Mancini

Canadian Oil Sands Ltd.'s (TSX:COS) Q1 2015 earnings were low because of weak oil prices, but there are several operational…

Read more »

The Motley Fool
Energy Stocks

What Is Oil Contango And How Will it Impact the Energy Patch?

| Matt Smith

Here's how you can manage the threat to oil prices created by oil contango with Suncor Energy Inc. (TSX:SU)(NYSE:SU), Crescent…

Read more »

The Motley Fool
Dividend Stocks

Should You Be a Long-Term Buyer of Imperial Oil Limited Today?

| Joseph Solitro

Imperial Oil Limited (TSX:IMO)(NYSE:IMO) released first-quarter earnings on April 30 and its stock has reacted by falling about 3%. Should…

Read more »

The Motley Fool
Energy Stocks

Should You Buy, Sell, or Hold Canadian Oil Sands Ltd. Today?

| Joseph Solitro

Canadian Oil Sands Ltd.’s (TSX:COS) stock has remained relatively flat since it released first-quarter earnings on April 30. What should…

Read more »

The Motley Fool
Energy Stocks

Why Penn West Petroleum Ltd.’s Financial Position Remains Precarious

| Matt Smith

Despite the positive news regarding recent asset dispositions, Penn West Petroleum Ltd.'s (TSX:PWT)(NYSE:PWE) outlook remains poor.

Read more »

The Motley Fool
Dividend Stocks

Which Stock Is a Better Bet for Dividend Investors: Enbridge Inc. vs. Suncor Energy Inc.

| Robert Baillieul

Should dividend-hungry investors buy Enbridge Inc. (TSX:ENB)(NYSE:ENB) or Suncor Energy Inc. (TSX:SU)(NYSE:SU)?

Read more »

The Motley Fool
Energy Stocks

Should You Buy, Sell, or Hold TransCanada Corporation Today?

| Joseph Solitro

TransCanada Corporation (TSX:TRP)(NYSE:TRP) released mixed first-quarter earnings on May 1 and its stock has reacted by remaining relatively unchanged. Is…

Read more »

The Motley Fool
Energy Stocks

Should You Buy Baytex Energy Corp. or Canadian Oil Sands Ltd. Right Now?

| Andrew Walker

Here's what investors need to know before buying Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) and Canadian Oil Sands Ltd. (TSX:COS).

Read more »

Energy Stocks

Is Encana Corporation Really Worth $18 Per Share?

| Matt DiLallo

One analyst recently upgraded shares of Encana Corporation (TSX:ECA)(NYSE:ECA) and gave it a US$18 price target.

Read more »

The Motley Fool
Energy Stocks

Why Energy Investors Need to Pay Close Attention to Suncor Energy Inc.’s Earnings

| Benjamin Sinclair

Suncor Energy Inc. (TSX:SU)(NYSE:SU) reported earnings for the first quarter of 2015. How should energy investors react?

Read more »

The Motley Fool
Dividend Stocks

Should You Buy, Sell, or Hold Arc Resources Ltd. Today?

| Joseph Solitro

Arc Resources Ltd. (TSX:ARX) release first-quarter earnings on April 29 and its stock has reacted by falling over 2.5%. Is…

Read more »

The Motley Fool
Energy Stocks

Which Is a Better Investment: Canadian Natural Resources Ltd. or Baytex Energy Corp.?

| Andrew Walker

Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) and Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) are both enjoying the recovery in oil prices, but one…

Read more »

The Motley Fool
Energy Stocks

Can We Call a Bottom in Precision Drilling Corporation?

| Karen Thomas, MSc, CFA

Here's why Precision Drilling Corporation (TSX:PD)(NYSE:PDS) is well positioned to emerge from this downturn even stronger.

Read more »

The Motley Fool
Energy Stocks

Is it Too Late to Buy Canadian Oil Sands Ltd.?

| Nelson Smith

With shares of Canadian Oil Sands Ltd. (TSX:COS) up more than 40% in the last six weeks, is there still…

Read more »

The Motley Fool
Dividend Stocks

Is Now the Right Time to Buy Cenovus Energy Inc.?

| Joseph Solitro

Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) released first-quarter earnings on April 29 and its stock has reacted by falling over 2%. Should…

Read more »

The Motley Fool
Energy Stocks

Is the Fracklog a Genuine Threat to Oil Prices?

| Matt Smith

Here's why the fracklog is not a meaningful threat to oil prices or the performance of Crescent Point Energy Corp.…

Read more »

Energy Stocks

Should You Buy or Avoid TransAlta Corporation Following Mixed Q1 Results?

| Joseph Solitro

TransAlta Corporation (TSX:TA)(NYSE:TAC) released first-quarter earnings on April 28, and its stock has responded by making a slight move to…

Read more »

The Motley Fool
Energy Stocks

Is Canadian Natural Resources Ltd. Prepared for Lower Oil Prices?

| Adam Mancini

Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) is one of Canada's largest producers of discounted heavy crude. Are its operations sustainable?

Read more »

The Motley Fool
Dividend Stocks

3 Reasons Why You Should Buy Inter Pipeline Ltd. Today

| Joseph Solitro

Here are three reasons why you should buy shares of Inter Pipeline Ltd. (TSX:IPL) today.

Read more »

The Motley Fool
Dividend Stocks

Why I Remain Bearish on Canadian Oil Sands Ltd.

| Matt Smith

Despite a recent rally and an improving outlook, Canadian Oil Sands Ltd. (TSX;COS) remains an unappealing investment.

Read more »