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

3 Growth Stocks to Buy and Hold Regardless of What Happens With the Delta Variant

| Jed Lloren

Worried about how the Delta variant might affect the stock market? Choose these three stocks regardless of what happens.

Read more »

Energy Stocks

1 Top TSX Index Stock to Buy in August

| Andrew Walker

This top TSX stock looks cheap right now. Here's why.

Read more »

Dividend Stocks

How to Make $500 With Canadian Stocks Every Month

| Stephanie Bedard-Chateauneuf, MBA

Earn $500 per month by buying three Canadian stocks: SmartCentres REIT (TSX:SRU.UN), Pembina Pipeline (TSX:PPL)(NYSE:PBA), and Timbercreek Financial (TSX:TF).

Read more »

Dividend Stocks

1 Top TSX Energy Stock to Buy to Play the Transition to Renewables

| Chris MacDonald

Here's why investors looking for a top-notch energy stock should consider Tourmaline Oil (TSX:TOU) right now.

Read more »

edit Safe pig, protect money
Dividend Stocks

Canadian Investors: Boost Your Passive Income With These 4 Safe Dividend Stocks

| Rajiv Nanjapla

Given their stable cash flows and healthy growth prospects, these four dividend stocks could strengthen your portfolio while delivering steady…

Read more »

Energy Stocks

3 Cheap Stocks to Buy With $300

| Sneha Nahata

The ongoing vaccination, acceleration in economic activities, and improving demand provide a solid foundation for growth in stocks.

Read more »

Dividend Stocks

2 Energy Stocks to Buy As Oil Rises

| Adam Othman

The energy sector has had a great run these past few years, but the sector is coming down from its…

Read more »

Energy Stocks

1 of the Best Canadian Stocks to Watch in August

| Amy Legate-Wolfe

Motley Fool investors could see a major pop from one of the best Canadian stocks in the next two weeks…

Read more »

Dividend Stocks

Coal Phasing Out: Consider These 2 Stocks for a Greener Utility Industry

| Adam Othman

More and more power companies are trying to phase out coal power plants and become greener. Companies focused on solar…

Read more »

Dividend Stocks

The 4 Best Canadian Stocks to Lock In a 6% Dividend Yield

| Puja Tayal

A 6% average dividend yield can double your money in 12 years. But some dividend stocks have more to offer. 

Read more »

Dividend Stocks

3 Top Undervalued Stocks to Buy Right Now

| Chris MacDonald

These three top undervalued stocks are among the best picks on the TSX today for long-term investors seeking growth at…

Read more »

Energy Stocks

Cenovus Stock: A Leaner, Greener Energy Play?

| Chris MacDonald

Here's why long-term investors seeking energy exposure may want to consider Cenovus Energy (TSX:CVE)(NYSE:CVE) stock.

Read more »

Dividend Stocks

4 TSX High Dividend Stocks to Buy to Retire Early

| Jitendra Parashar

Here's a list of four high dividend-paying TSX stocks to buy today that could help you retire early if you…

Read more »

Energy Stocks

A Top Energy Stock to Own in 2021

| Nikhil Kumar

Suncor Energy Inc. (TSX:SU)(NYSE:SU) is working on reducing the greenhouse gas emissions of the company's operations.

Read more »

Energy Stocks

Investors: Buy These 2 Green TSX Stocks

| Kay Ng

The higher frequency in extreme weather lately is disturbing. Invest in these green TSX stocks to help Earth and get…

Read more »

Dividend Stocks

2 of the Best Stocks to Buy if You Think We’re in a Bubble

| Christopher Liew, CFA

Earning uninterrupted dividend income regardless of the market environment is very possible. The Imperial Oil stock and Toronto-Dominion Bank stock…

Read more »

Dividend Stocks

2 Stocks Smart Investors Are Buying Right Now

| Adam Othman

Constellation Software stock and Canadian National Railway stock could be excellent additions to your portfolio today.

Read more »

Dividend Stocks

Maximize the Recent Weakness and Buy TSX Energy Stocks in August

| Vineet Kulkarni

TSX energy stocks have been remarkable outperformers since last year amid the reopening hopes. Here are two of them.

Read more »

Energy Stocks

3 TSX Stocks That Corrected Over 20% Recently: Should You Buy?

| Puja Tayal

The stock market corrected in July, and now it is back to rallying. Three stocks dipped over 20%. Should you…

Read more »

Energy Stocks

Why Cenovus Stock Is an Excellent Buy Right Now

| Chris MacDonald

Here's why investors may want to consider Cenovus Energy (TSX:CVE)(NYSE:CVE) stock in this current environment.

Read more »

Dividend Stocks

4 Top Canadian ETFs to Buy With $400

| Puja Tayal

Do you want to invest in the stock market but don’t know where to start? A good place to start…

Read more »

Dividend Stocks

2 Recession-Proof Dividend Stocks to Buy

| Adam Othman

BCE Inc. stock and TransAlta Renewables stock are ideal recession-proof dividend stocks to buy if you want to protect and…

Read more »

Dividend Stocks

4 Canadian Dividend Stocks With Yields of 6% and Above

| Sneha Nahata

These Canadian companies are offering a high dividend yield of 6% and above.

Read more »

stock research, analyze data
Dividend Stocks

Got $1,000? 3 Best TSX Stocks to Buy Right Now

| Vineet Kulkarni

Here are three top TSX stocks that look attractive from a valuation standpoint and offer decent growth prospects.

Read more »

Energy Stocks

3 Canadian Renewable Stocks to Buy Amid Rising Global Warming Concerns

| Jitendra Parashar

These three fundamentally strong renewable energy stocks could help Canadian investors to get a handsome return on their investment.

Read more »

Dividend Stocks

Suncor (TSX:SU) Q2 Earnings: Top 4 Takeaways

| Adam Othman

Suncor Energy Inc. stock released its Q2 earnings report and it seems like an excellent stock to add to your…

Read more »

Energy Stocks

3 of the Best Canadian Energy Stocks to Buy on Sale Today

| Daniel Da Costa

Energy stocks are crucial for the long-term growth of your portfolio, and this trio of Canadian businesses are some of…

Read more »

Dividend Stocks

2 Oil Stocks That Took a Beating: Buy Low?

| Christopher Liew, CFA

Superior returns await Canadians investing in Whitecap Resources stock and Cenovus Energy stock. You can buy them low if COVID’s…

Read more »

Energy Stocks

4 Stocks to Buy Today

| Puja Tayal

The international borders open today in a phased manner. It is time to buy travel stocks that corrected in July…

Read more »

Dividend Stocks

Buy and Hold This 1 Top Dividend Stock Forever

| Adam Othman

Fortis Inc. stock is an ideal stock that you can buy and hold forever in your investment portfolio regardless of…

Read more »

Energy Stocks

A Top TSX Energy Stock to Buy in August 2021

| Nikhil Kumar

Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) has already delivered on the company's commitment to reinstate a dividend after closing the Husky transaction.

Read more »

calculate and analyze stock
Dividend Stocks

The Smartest High-Dividend Stocks to Buy Today

| Adam Othman

Investing is all about making smart choices at the right time. And if you are planning to add to your…

Read more »

Dividend Stocks

Best Risk & Reward Option: 1 Energy Stock to Buy if Oil Prices Tank

| Christopher Liew, CFA

Earn income for life on top of your pensions. Imperial Oil stock hasn’t missed a dividend payment since the 1880s.…

Read more »

Dividend Stocks

TFSA Investors: 2 Stocks to Buy and Hold Forever

| Adam Othman

Fortis Inc. stock and Canadian National Railway stock are ideal buy-and-hold assets for any TFSA portfolio.

Read more »

Dividend Stocks

3 Safe Canadian Stocks With Above 5% Dividend Yields

| Rajiv Nanjapla

Given their stable cash flows, strong liquidity, and high dividend yields, these three Canadian stocks could boost your passive income…

Read more »

Dividend Stocks

Worried About BlackBerry’s Losses? Hedge Your Portfolio With 3 Stocks

| Puja Tayal

BlackBerry (TSX:BB)(NYSE:BB) stock is seeing a cool-off. If your BlackBerry holdings are in the red, hedge them with dividend stocks. 

Read more »

Energy Stocks

The 5 Best TSX Stocks I’d Buy With $500 Right Now

| Sneha Nahata

Investing in stocks is cheap and can be highly rewarding, especially if one can remain invested for the long term.

Read more »

Energy Stocks

Top 3 TSX 60 Stocks to Buy Now

| Vishesh Raisinghani

TSX stocks like TD Bank (TSX:TD)(NYSE:TD) have the potential to outperform.

Read more »

Energy Stocks

3 Top Energy Stocks to Buy in Late 2021

| Kay Ng

If you want to make money from energy stocks, you would want to read this first. Here's why you might…

Read more »

Energy Stocks

Got $10? 2 Growth Stocks That Could Double This Year

| Christopher Liew, CFA

Baytex Energy stock and Roots Corp stock trade at ridiculously low prices. However, the growth potentials are massive in that…

Read more »