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

Hate Taxes? 3 TFSA Stocks That Can Earn You $11/Day

| Adam Othman

The TFSA provides a fantastic opportunity to grow your income without increasing your tax bill, making it an ideal option…

Read more »

Energy Stocks

Canadians: Why Freehold Royalties (TSX:FRU) Is the Ultimate Income Stock

| Ambrose O'Callaghan

Canadian investors who are starving for consistent income in this choppy market should snatch up Freehold Royalties Ltd. (TSX:FRU) today.

Read more »

canadian energy oil
Energy Stocks

Is Now the Time to Sell These 3 TSX Energy Stocks?

| Christopher Liew, CFA

Despite the volatility in oil markets due to falling crude prices, investors should still hold, not sell, these three outperforming…

Read more »

Energy Stocks

Up 62%, ARC Resources Stock Is Still a Screaming Buy for the Long Term

| Jitendra Parashar

These key reasons make ARX stock one of the best dividend stocks to buy for the long term on the…

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Why Cenovus Energy (TSX:CVE) Rose 8% Last Week

| Andrew Button

Cenovus Energy (TSX:CVE)(NYSE:CVE) made large gains last week. Here's why.

Read more »

Energy Stocks

Got $5,000? 1 TSX Energy Stock to Turn it Into $10,000

| Christopher Liew, CFA

One TSX energy stock could more than double a $5,000 investment because of robust free cash flows and soaring profits…

Read more »

Stocks for Beginners

3 High-Yield Energy Stocks to Buy Now

| Demetris Afxentiou

The market is full of long-term dividend stocks to power up your portfolio. Here’s three high-yield energy stocks to buy…

Read more »

Dividend Stocks

Suncor Stock (TSX:SU): A Value Stock Worth Buying or a Value Trap?

| Karen Thomas, MSc, CFA

Suncor Energy stock is poised for a rebound as the company makes important changes to address weak operational performance.

Read more »

Dividend Stocks

Got $250? Here Are 3 Smart Stocks to Buy Now

| Adam Othman

If you have $250 to spare, consider investing in these three TSX stocks and stay invested long-term to capitalize on…

Read more »

Dividend Stocks

Monthly Passive Income: Earn $560/Month With These 2 Stocks

| Adam Othman

Consider adding these two dividend stocks to your TFSA to generate substantial monthly, tax-free passive income.

Read more »

Energy Stocks

TSX Energy Stocks Still Gushing With Cash

| Joey Frenette

Suncor Energy (TSX:SU)(NYSE:SU), and Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) are discounted energy stocks worth checking out.

Read more »

Energy Stocks

TFSA Investors: 2 Top TSX Stocks to Buy Now for a $6,000 TFSA

| Nicholas Dobroruka

Lots of TSX stocks have been rallying as of late. Here are two top picks that are perfect for long-term…

Read more »

Engineers walk through a facility.
Energy Stocks

Forget Oil: This Commodity Is a Strong Long-Term Bet

| Adam Othman

Oil stocks might be popular, but fertilizer stocks like Nutrien (TSX:NTR)(NYSE:NTR) might be stronger long-term investments to consider.

Read more »

A worker wears a hard hat outside a mining operation.
Energy Stocks

Suncor Stock: Don’t be Fooled, This Isn’t a Growth Stock

| Amy Legate-Wolfe

Suncor stock (TSX:SU)(NYSE:SU) has doubled in the last year alone, which should make it a growth stock. But long-term holders…

Read more »

Energy Stocks

Warning to Investors: Get Out of These Formerly Safe Stocks Now!

| Amy Legate-Wolfe

This industry used to have some of the best safe stocks you could buy, but clean energy stocks are today’s…

Read more »

Energy Stocks

This Undervalued Energy Stock Offers a 9% Earnings Yield

| Vishesh Raisinghani

Energy stocks like Tourmaline Oil (TSX:TOU) should be on your radar.

Read more »

Energy Stocks

Energy Rebound: Top 2 Undervalued Oil Stocks to Buy

| Vishesh Raisinghani

Oil stocks like Suncor (TSX:SU)(NYSE:SU) could stage a comeback, as energy prices improve.

Read more »

Energy Stocks

Forget Passive Income: Choose This Investment Strategy Instead

| Amy Legate-Wolfe

Passive income is definitely great to use up front, but this other strategy can create significant wealth in the millions!

Read more »

Energy Stocks

Will Vermilion Energy (TSX:VET) Stock Breach $50 This Year?

| Vineet Kulkarni

VET stock seems attractive amid the next leg of the energy rally.

Read more »

Utility, wind power
Energy Stocks

Monthly Passive Income: 2 Top TSX Dividend Stocks to Buy for a Self-Directed TFSA

| Andrew Walker

TFSA investors can buy top high-yield monthly dividend stocks at cheap prices today.

Read more »

Energy Stocks

Should You Buy Pembina Pipeline (TSX:PPL) Stock for Its Monthly Dividends?

| Vineet Kulkarni

Pembina stock has consistently outperformed its bigger peers.

Read more »

A tractor harvests lentils.
Energy Stocks

3 Commodity Stocks You Can Hold For Decades

| Adam Othman

Futures are too complex an investment instrument for most retail investors, but you can still gain exposure to the commodities…

Read more »

Dividend Stocks

My 3 Favourite TSX Dividend Stocks Right Now

| Vineet Kulkarni

Investors can achieve peace of mind with these three dividend stocks that will likely continue to pay stable dividends for…

Read more »

Energy Stocks

Top TSX Energy Stocks to Buy Right Now

| Vineet Kulkarni

Canadian energy bigwigs still offer handsome growth prospects.

Read more »

Canadian energy stocks are rising with oil prices
Energy Stocks

Canadian Natural Resources (TSX:CNQ): The Best-in-Class Energy Stock Today

| Christopher Liew, CFA

A large-cap energy stock is a must-own today for its diverse, low-risk asset base and generous dividend payments.

Read more »

Happy shoppers look at a cellphone.
Dividend Stocks

Beginner Investors: 2 Blue-Chip TSX Stocks to Buy Today

| Adam Othman

Are you new to investing and looking for stocks for beginners? These two top TSX stocks could be ideal additions…

Read more »

Energy Stocks

Passive Income – 3 Dirt Cheap Stocks Raising Their Dividends

| Andrew Button

Value stocks like Cenovus Energy are raising their dividends, offering investors an opportunity to get in on the growth.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Should You Buy Suncor (TSX:SU) Right Now?

| Adam Othman

Suncor (TSX:SU) stock might be a good investment at current levels, as the weakness in the energy sector makes it…

Read more »

Energy Stocks

Whitecap Resources Stock: To Buy or Not to Buy in 2022?

| Kay Ng

Whitecap Resources (TSX:WCP) stock is absolutely cheap in this high-energy-price environment. It also pays a nice monthly dividend.

Read more »

canadian energy oil
Energy Stocks

Have $1,000? 1 All-Weather Stock to Buy Right Now

| Joey Frenette

Suncor Energy (TSX:SU)(NYSE:SU) stock is a dividend value play that's too cheap to ignore after oil's dip.

Read more »

Energy Stocks

ARC Resources (TSX:ARX): A Safer Pick in Uncertain Market Conditions

| Christopher Liew, CFA

Canada’s third-largest natural gas producer is a safer pick in uncertain market conditions.

Read more »

Energy Stocks

Rise From Obscurity: Tamarack Valley (TSX:TVE) Is a “Strong Buy” Today!

| Christopher Liew, CFA

One energy stock that has risen from obscurity is a strong buy today if you’re looking for long-term capital growth…

Read more »

Energy Stocks

2 Incredibly Undervalued Energy Stocks to Buy Right Now

| Chris MacDonald

Here's why Baytex Energy (TSX:BTE) and Parex Resources (TSX:PXT) are two undervalued energy stocks investors may want to consider.

Read more »

oil and gas pipeline
Energy Stocks

2 High-Yield Energy Stocks to Buy in Today’s Market

| Christopher Liew, CFA

A pair of high-yield energy stocks are the best options for income investors chasing after dividends in today’s market.

Read more »

Energy Stocks

2 UNDERVALUED TSX Energy Stocks That Offer Massive Growth Prospects

| Vineet Kulkarni

Is it too late to get on board TSX energy stocks?

Read more »

investment research
Energy Stocks

TFSA Investors: 2 Incredible Deals to Buy Today

| Joey Frenette

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) and another energy stock looks like incredible bargains for long-term investors.

Read more »

Energy Stocks

3 Top TSX Energy Stocks That Pay Massive, Growing Dividends

| Robin Brown

TSX energy stocks are flush with cash, and they are giving it back to shareholders. Here are three top stocks…

Read more »

Energy Stocks

3 Growth Stocks to Buy Now to Get Rich in a Decade

| Amy Legate-Wolfe

Many TSX stocks are growing this last month, but these three should be top of your list for the next…

Read more »

Energy Stocks

Is Cenovus Energy (TSX:CVE) the Best TSX Stock to Buy Today?

| Vineet Kulkarni

TSX energy stocks will likely continue to outperform.

Read more »

TSX Today
Energy Stocks

TSX Today: What to Watch for in Stocks on Friday, August 19

| Jitendra Parashar

The main TSX index is likely to open lower today due to a bearish movement in commodity prices -- especially…

Read more »