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

edit Safe pig, protect money
Dividend Stocks

Market Volatility: 2 Safe Canadian Stocks to Buy Today

| Adam Othman

BCE stock and Fortis stock could be ideal assets to buy and hold during volatile market conditions to protect your…

Read more »

Dividend Stocks

Passive Income Alert: Earn $300/Month With These 2 Stocks

| Christopher Liew, CFA

Canadians can earn $300 extra every month with minimal participation. Be a passive investor and invest in high-yield assets like…

Read more »

Dividend Stocks

3 Top TSX Stocks That Outperformed Their Individual Sectors

| Vineet Kulkarni

Energy, tech, and banking sectors stood strong in the recent reopening rally. Here are TSX stocks that beat peers in…

Read more »

Dividend Stocks

Passive Income: 3 Top Canadian Stocks to Say Goodbye to Your Financial Worries

| Jitendra Parashar

Here are three reliable high dividend-paying stocks that could help you say goodbye to your financial worries by generating consistent…

Read more »

Dividend Stocks

3 of the Best Canadian Stocks to Get Super-Rich Before Retirement

| Jitendra Parashar

These three of the best Canadian stocks could help you get super-rich before retirement if you act in time.

Read more »

online shopping
Dividend Stocks

Top 5 Dividend Stocks for Beginners

| Puja Tayal

When the stock market is in a bear zone, you can lock in a higher dividend yield. Here are five…

Read more »

Energy Stocks

2 Top Canadian Stocks to Buy While They’re Still Cheap

| Nicholas Dobroruka

Looking for some value on the TSX? Here are two bargain Canadian stocks that should be at the top of…

Read more »

Energy Stocks

This Top TSX Energy Stock Could Be Due for Another Massive Rally

| Chris MacDonald

Here's why investors looking for a top-notch Canadian energy stock should consider Parex Resources (TSX:PXT) right now.

Read more »

Dividend Stocks

2 Discounted Stocks to Buy As Energy Sector Slumps

| Adam Othman

The energy sector is going through a rough patch. The sector hit its peak in mid-June and it's been on…

Read more »

Dividend Stocks

A Complete Guide to Investing in Dividend Stocks

| Puja Tayal

Are you new to stock markets and looking to invest in dividend stocks? Here is a complete guide to dividend…

Read more »

money cash dividends
Dividend Stocks

The 4 Best Passive-Income Stocks to Buy Right Now With $400

| Sneha Nahata

These dividend stocks are among the options to create a secondary income stream.

Read more »

Dividend Stocks

Is TC Energy Stock a Buy Following Earnings?

| Chris MacDonald

Here's why long-term investors seeking exposure to pipeline stocks may want to give TC Energy (TSX:TRP)(NYSE:TRP) stock a look.

Read more »

Energy Stocks

Maximizing Shareholder Value at an Iconic Canadian Energy Company

| Nikhil Kumar

Inter Pipeline Ltd. (TSX:IPL) has created a new ventures segment that focuses on the development of large-scale innovative projects to…

Read more »

Energy Stocks

Should You Chase the Suncor Energy (TSX:SU) Downturn?

| Puja Tayal

Suncor Energy (TSX:SU)(NYSE:SU) stock has dropped 28% in two months as oil prices fell. Should you chase this downturn and…

Read more »

Energy Stocks

BUY ALERT: 3 Energy Stocks to Snatch Up Now

| Ambrose O'Callaghan

Canadians on the hunt for discounts should look to top energy stocks like Suncor Energy Inc. (TSX:SU)(NYSE:SU) and others.

Read more »

Energy Stocks

2 Oversold Energy Stocks to Buy Now

| Andrew Walker

These two energy stocks look cheap right now. Here's why.

Read more »

Energy Stocks

3 Undervalued Stocks That Could Deliver Superior Returns

| Rajiv Nanjapla

Given their healthy growth prospects and attractive valuation, these three Canadian undervalued stocks can deliver superior returns.

Read more »

Dividend Stocks

The 4 Best Canadian Stocks to Buy With $500

| Sneha Nahata

Even though the majority of stocks are trading near their highs, I see equities as the best investment option to…

Read more »

Dividend Stocks

5 Stocks Under $50 to Buy in August 2021

| Puja Tayal

If you got $250 to invest, here are five stocks under $50 that could give you a good blend of…

Read more »

Energy Stocks

Looking for Value? 4 Energy Stocks to Consider

| Kay Ng

There's greater value in traditional energy stocks, but undervalued renewable energy stocks can provide more stability and growth.

Read more »

Dividend Stocks

5 Top Stocks to Buy in the 4th COVID Wave

| Puja Tayal

The stock market saw a correction, as Canada entered the fourth COVID wave. This is a good time to buy…

Read more »

Dividend Stocks

2 Top Canadian Stocks to Buy While They’re Still Cheap

| Nicholas Dobroruka

There’s no shortage of high-priced stocks on the TSX. Here are two top picks to buy today that are trading…

Read more »

Dividend Stocks

Got $700? 3 Top TSX Stocks to Buy Now

| Christopher Liew, CFA

Your $700 can build a balanced mixed of assets that offers dividend growth, stability, and massive capital gains. The intelligent…

Read more »

Dividend Stocks

Worried About Market Volatility? 3 Top TSX Stocks to Buy Today

| Vineet Kulkarni

A reasonable portion of your portfolio in stable, dividend-paying TSX stocks will come in handy in volatile markets.

Read more »

Energy Stocks

3 Top Dividend Stocks to Buy Under $30

| Rajiv Nanjapla

Given their stable cash flows and healthy dividend yields, these three top dividend stocks can boost your passive income.

Read more »

Energy Stocks

Canadian Stocks You Should Be Ready to Buy

| Christopher Liew, CFA

Take advantage of the energy sector's rebound to earn generous income in 2021 and beyond. Be ready to buy the…

Read more »

Dividend Stocks

My 2 Favourite Canadian Stocks Right Now

| Adam Othman

Shopify stock and Brookfield Renewable Partners stock are my favourite Canadian stocks today for outsized, long-term returns.

Read more »

Dividend Stocks

3 Monthly Dividend Stocks Under $50 With Over 6% Yields

| Sneha Nahata

Monthly dividend payouts are frequent and appeal more as they supplement one’s income.

Read more »

Dividend Stocks

Why My Outlook on Suncor Energy Stock Is Changing

| Chris MacDonald

Investors have a lot to like about Suncor Energy (TSX:SU)(NYSE:SU) and Suncor Energy stock, but is the company's valuation stretched?

Read more »

Dividend Stocks

Worried About a Market Pullback? Buy These 2 Stocks Right Now

| Chris MacDonald

Investors worried about the potential for a market crash should consider Fortis (TSX:FTS)(NYSE:FTS) and Kirkland Lake Gold (TSX:KL)(NYSE:KL).

Read more »

Energy Stocks

Like Suncor Stock? 3 More Energy Stocks to Consider 1st

| Kay Ng

Before you buy Suncor (TSX:SU)(NYSE:SU) stock, take a closer look at these other energy stocks that have been more reliable!

Read more »

Stocks for Beginners

Got $500? 3 Top TSX Stocks to Buy Today

| Jitendra Parashar

Canadian investors can buy three of the best TSX stocks with an investment of as low as $500 to gain…

Read more »

Energy Stocks

2 Top Canadian Stocks to Buy Right Now

| Nicholas Dobroruka

If you’re a long-term investor, you’ll want to have these two top Canadian stocks on your watch list right now.

Read more »

Dividend Stocks

2 Beaten-Down TSX Energy Stocks That Are Screaming Buys

| Vineet Kulkarni

Let’s see why this could be a short-term blip, and long-term investors could make the most of it by buying…

Read more »

Energy Stocks

2 Cheap Energy Stocks for Oil Bulls to Buy

| Andrew Walker

These two energy stocks look undervalued right now. Here's why.

Read more »

Dividend Stocks

1 of the Cheapest TSX Energy Stocks to Buy for the Dividend

| Joey Frenette

Suncor Energy (TSX:SU)(NYSE:SU) is a TSX energy stock that is rolling over right now, but should contrarians attempt to catch…

Read more »

Dividend Stocks

2 Top Oil Stocks to Buy Today

| Adam Othman

Not all oil stocks are pretty attractive buys right now, thanks to the recent growth momentum, but there are two…

Read more »

Dividend Stocks

2 High-Yield Dividend Stocks to Buy Right Now

| Adam Othman

NorthWest Healthcare Properties REIT and Pembina Pipeline stock are two high-yield dividend stocks that could make you much wealthier in…

Read more »

Dividend Stocks

3 Generous Dividend Stocks Yielding up to 7%

| Christopher Liew, CFA

Boost your investment income with the least-celebrated but high-yield TSX stocks. Keyera stock, Acadian Timber stock, and Timbercreek Financial stock…

Read more »

Energy Stocks

2 Top Energy Stocks to Buy Right Now

| Chris MacDonald

Here's why investors seeking top energy stocks should consider Northland Power (TSX:NPI) and Cenovus Energy (TSX:CVE)(NYSE:CVE).

Read more »