Best Canadian Energy Stocks

Energy stocks, also known as oil stocks or black gold stocks, represent a large percentage of the Canadian stock market and the options can be overwhelming at times.

Finding the best energy dividend stocks is actually not that simple. Do you look for yield? or do you look for growth? With the electric vehicle transition, what is the growth supposed to be? As you can see, it’s not that simple these days.

The energy industry is changing. Don’t assume what worked for your portfolio 15 years ago will work for the next 15 years. Peak oil happened in 2020 according to many and oil drilling will change from here on.

Often times, many of the stocks can fit your portfolio, it just happens that when you are ready to buy, one may be preferable over the others.

Canadian Energy Stocks

Not all energy stocks actually provide the same business. There are 3 industries with business distinctions that are important to be aware of when purchasing.

Before we review the companies by industries, here are many of the players. Three of the big five are Canadian dividend aristocrats and Canadian Blue Chip Stocks with SU, CNQ and IMO. 

With an awareness of the players and their sizes, it’s time to look at them by industries. Investors should avoid overlapping industries if possible.

As it happens, the oil & gas industries is broken down into 3 groups: downstream, midstream and upstream. Unfortunately, the industry classification doesn’t quite match since some players overlap the groups.

  • Downstream – processing and refining
  • Midstream – transporation and storage
  • Upstream – underground exploration

Oil & Gas – Midstream Industry

This industry primarily operates in the transportation and storage of oil & gas.

Ticker Ticker Company Market Cap P/E Aristocrat Graph SectorID IndustryID
ENB TSE:ENB Enbridge 100.87 17.52 YES 1 5 71
TRP TSE:TRP TC Energy 59.74 31.93 YES 1 5 71
PPL TSE:PPL Pembina Pipeline 21.30 0.00 YES 1 5 71
IPL TSE:IPL Inter Pipeline 8.09 16.82 NO 1 5 71
KEY TSE:KEY Keyera Corp 6.34 39.76 YES 1 5 71
GEI TSE:GEI Gibson Energy 3.44 30.81 NO 1 5 71
TPZ TSE:TPZ Topaz Energy 2.49 106.29 NO 1 5 71

Oil & Gas – Integrated Industry

This industry represents a company that operates in both the downstream and upstream.

Ticker Ticker Company Market Cap P/E Aristocrat Graph SectorID IndustryID
SU TSE:SU Suncor 46.36 19.88 NO 1 5 70
CVE TSE:CVE Cenovus Energy 31.50 44.57 NO 1 5 70
IMO TSE:IMO Imperial Oil 29.07 54.30 YES 1 5 70

Oil & Gas – E&P Industry

This industry covers companies involved in the exploration and production. 

Ticker Ticker Company Market Cap P/E Aristocrat Graph SectorID IndustryID
CNQ TSE:CNQ Canadian Natural Resources 61.74 10.59 YES 1 5 69
TOU TSE:TOU Tourmaline Oil 14.60 7.90 NO 1 5 69
OVV TSE:OVV Ovintiv 11.40 0.00 NO 1 5 69
ARX TSE:ARX Arc Resources 8.25 15.21 NO 1 5 69
WCP TSE:WCP Whitecap Resources 4.34 2.10 NO 1 5 69
CPG TSE:CPG Crescent Point Energy 3.28 1.52 NO 1 5 69
ERF TSE:ERF Enerplus Corporation 3.16 0.00 NO 1 5 69
PSK TSE:PSK PrairieSky Royalty 3.11 33.26 NO 1 5 69
CG TSE:CG Centerra Gold 2.73 0.00 NO 1 1 69
VET TSE:VET Vermillion Energy 1.86 2.52 NO 1 5 69
PEY TSE:PEY Peyto Exploration & Development Corp. 1.85 12.59 NO 1 5 69
FRU TSE:FRU Freehold Royalties 1.69 36.01 NO 1 5 69
DPM TSE:DPM Dundee Precious Metals 1.56 5.64 NO 1 5 69
BNE TSE:BNE Bonterra Energy 0.19 1.29 NO 1 5 69

Top Canadian Energy Dividend Stocks

1. Enbridge

ENB - Enbridge Enbridge Inc. is the largest energy infrastructure company in North America. It is Canada’s largest natural gas distributor engaging in the collection, transportation, processing and storage of oil and gas. Enbridge caters to 3.7 million customers in Ontario, Quebec, New Brunswick, and New York.

It owns an extensive network of about 192,000 miles of natural gas and NGL pipelines across North America and the Gulf of Mexico. Its crude oil and liquids transportation systems are huge comprising of more than 17,000 miles of active pipelines.

The company is known for its high quality liquids and natural gas infrastructure assets. In addition, Enbridge has 3.1 Bcf/d of processing capacity and 438 Bcf of net natural gas storage capacity. It also owns interests in nearly 3,000 MW of renewable generation capacity.

Key Investment Data

  • Ticker: TSE:ENB
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 100.87B
  • P/E: 17.52
  • Dividend Yield: 6.71%
  • Payout Ratio (TTM): 145.30%

2. Canadian Natural Resources

CNQ - Canadian Natural Resources Canadian Natural Resources is a diversified and independent energy producer in the world. It is the largest independent natural gas and heavy crude oil producer in Canada.  It operates a balanced mix of natural gas, light crude oil, heavy crude oil, and oil sands. The company holds some of the best oil sand assets in North America, particularly thermal in situ properties, having tremendous growth potential.

The company’s business can be broadly classified into Exploration and Production (North America, North Sea, offshore Africa), Oil Sands Mining and Upgrading, and Midstream and Refining segments. The Exploration and Production segment is Canadian Natural’s core business, while the other two businesses provide a nice diversification.

Canadian Natural has a balanced mix of natural gas, light crude oil, heavy crude oil, bitumen, and SCO. The company also owns midstream assets consisting of two crude oil pipeline systems and cogeneration plants, which enables the transportation of heavy crude oil in international markets.

Key Investment Data

  • Ticker: TSE:CNQ
  • Sector: Energy
  • Industry: Oil & Gas E&P
  • Market Cap: 61.74B
  • P/E: 10.59
  • Dividend Yield: 4.48%
  • Payout Ratio (TTM): 36.90%

3. Suncor

SU - Suncor Energy Suncor Energy is one of the largest independent energy companies in the world engaging in oil sands operations, offshore oil and gas production, petroleum refining and marketing. It is the largest oil producer in Canada.

The company has operations across the entire value chain, including resource extraction, upgrading, refining and marketing, and midstream logistics. In addition, Suncor is involved in energy trading and operates a renewable energy business. Suncor owns offshore assets in key strategic geographic locations like the U.K. North Sea, Canada’s east coast and Norway.

The company operates four refineries, an ethanol plant, wind farms, and over 1700 retail sites in North America and owns 940 mbpd oil production, 550 mbpd upgrading, and 460 mbpd refining capacities.

Key Investment Data

  • Ticker: TSE:SU
  • Sector: Energy
  • Industry: Oil & Gas Integrated
  • Market Cap: 46.36B
  • P/E: 19.88
  • Dividend Yield: 5.28%
  • Payout Ratio (TTM): 52.70%

4. Keyera Corp

KEY - Keyera Corp Keyera Corp. is one of the largest independent midstream energy companies with extensive interconnected assets across Canada. The company caters to the needs of oil and gas producers in the Western Canada Sedimentary Basin, and provides NGL gathering and processing, fractionation, storage, transportation, logistics and marketing services.

Keyera’s core infrastructure is strategically located in key producing areas of Western Canada Sedimentary basin and Edmonton/ Fort Saskatchewan energy hub. The company also markets iso-octane, propane, butane, condensate and crude oil to customers in Canada and the United States.

It operates through Gathering and Processing, Liquids Infrastructure and Marketing segments. Keyera has strong expertise in operating complex energy processing facilities and provides a full range of essential midstream services to its customers.

Key Investment Data

  • Ticker: TSE:KEY
  • Sector: Energy
  • Industry: Oil & Gas Midstream
  • Market Cap: 6.34B
  • P/E: 39.76
  • Dividend Yield: 6.69%
  • Payout Ratio (TTM): 266.20%

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