Best Energy Stocks In Canada For January 2024

Dividend Earner

Dividend Earner

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3 min read Affiliate Disclosure

Canada is renowned for its abundance of natural resources, and the oil sector is definitely one of the primary sectors driving the Canadian economy. As such, investors have many options when it comes to energy stocks.

If you look at the TSX 60, 13 of the 60 stocks are energy stocks ( 21.67%) and the largest representation, followed by financials and materials with 10 each. Over 50% of the index is concentrated in the three primary sectors driving the Canadian economy.

If you invest in Canada, it’s important you understand the energy sector and what the company’s business is. Some of the industries are dependent on others.  See the industry breakdown below, followed by the top Canadian energy stocks.

  • Oil & Gas – Drilling
  • Oil & Gas – E&P
  • Oil & Gas – Integrated
  • Oil & Gas – Midstream
  • Oil & Gas – Services
  • Oil & Gas – Refining & Marketing

With that said, don’t forget we may have reached peak oil, and the push for electric vehicles will change the landscape over time.

One of my primary data points when researching a stock includes the Chowder Rule, as it establishes the potential total return of the company in the short term for both the dividend and the stock appreciation. Find the right stock for your portfolio.

Best Energy Stocks

A word of caution: bigger isn’t necessarily better, but larger Canadian oil stocks could provide stability. Energy stocks also do not behave like Canadian bank stocks.

While all of these stocks are oil stocks, know what you want to own. Some energy stocks are pure play drilling, some are just about transport and others have a full vertical integration to the pump.

Ticker Ticker Company Market Cap P/E Yield Aristocrat Graph SectorID IndustryID
ENB TSE:ENB Enbridge 106.67 18.86 7.30 YES 1 5 71
CNQ TSE:CNQ Canadian Natural Resources 103.22 14.27 4.35 YES 1 5 69
SU TSE:SU Suncor 67.91 8.74 4.12 NO 1 5 70
TRP TSE:TRP TC Energy 58.52 21.53 6.81 YES 1 5 71
CVE TSE:CVE Cenovus Energy 51.05 11.31 2.63 NO 1 5 70
IMO TSE:IMO Imperial Oil 51.04 11.06 2.52 YES 1 5 70
PPL TSE:PPL Pembina Pipeline 30.14 16.72 5.31 YES 1 5 71
TOU TSE:TOU Tourmaline Oil 21.23 12.07 2.12 YES 1 5 69
OVV TSE:OVV Ovintiv 17.32 6.65 2.55 NO 1 5 69
ARX TSE:ARX Arc Resources 14.04 11.75 2.89 NO 1 5 69
KEY TSE:KEY Keyera Corp 8.77 24.70 5.22 NO 1 5 71
PSK TSE:PSK PrairieSky Royalty 6.72 29.27 3.56 NO 1 5 69
VRN TSE:CPG Veren 6.60 0.00 4.31 NO 1 5 69
PKI TSE:PKI Parkland Corporation 6.58 17.35 3.72 YES 1 5 72
WCP TSE:WCP Whitecap Resources 6.10 9.03 7.15 NO 1 5 69
ERF TSE:ERF Enerplus Corporation 5.66 11.41 1.28 NO 1 5 69
GEI TSE:GEI Gibson Energy 3.69 21.62 7.22 NO 1 5 71
TPZ TSE:TPZ Topaz Energy 3.60 80.10 5.16 NO 1 5 71
PEY TSE:PEY Peyto Exploration & Development Corp. 2.76 8.70 9.31 NO 1 5 69
VET TSE:VET Vermillion Energy 2.41 0.00 3.19 NO 1 5 69
FRU TSE:FRU Freehold Royalties 2.11 15.58 7.70 NO 1 5 69
ESI TSE:ESI Ensign Energy Services 0.44 12.74 0.00 NO 1 5 68
BNE TSE:BNE Bonterra Energy 0.18 4.86 0.00 NO 1 5 69
5 year Canadian oil stocks return

Finding An Undervalued Oil Stocks

It’s not easy to find an undervalued stock in this space. One way I use this is to assess the current yield against the 5-year average. The capital-intensive nature of the business and the crude oil prices mostly have an impact on future income as opposed to the valuation.

Cash flow is king with these companies, and their ability to profit from crude oil at a certain price is key.

Note that not all dividend stock screeners are created equal. Not many screeners focus on dividend data and dividend strength. You should consider a screener such as Dividend Snapshot Screeners.

While many of the big players go through seasons, CNQ has consistently shown up as one of the best Canadian dividend stocks based on a pure screening methodology.

TSE CNQ SMALL

Canadian Natural Resources

tse:cnq | Energy | Oil & Gas E&P

TSE IMO SMALL

Imperial Oil

tse:imo | Energy | Oil & Gas Integrated

TSE SU SMALL

Suncor

tse:su | Energy | Oil & Gas Integrated

TSE WCP SMALL

Whitecap Resources

tse:wcp | Energy | Oil & Gas E&P

TSE TOU SMALL

Tourmaline Oil

tse:tou | Energy | Oil & Gas E&P