Best Energy Stocks In Canada For November 2023

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Dividend Earner

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2 min read Affiliate Disclosure

Canada is renowned for the abundance of natural resources and the oil sector is definitely one of the primary sectors driving the Canadian economy. As such, there are many options for investors 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 3 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 include the Chowder Rule now 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 that bigger isn’t necessary better, but the larger Canadian oil stocks could provide stability.

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 all the way to the pump.

Finding An Undervalued Oil Stocks

It’s not easy to find an undervalued stock in this space. One way I use 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 impact on future income as oppose to the valuation.

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

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

Some of these holdings are favorite by stock analysts on the Business News Network.

1. 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 Resources 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: 97.35B
  • Market Cap Group: Large Cap
  • P/E: 13.89
  • Dividend Yield: 4.48%

2. Imperial Oil

Imperial is Canada's largest refiner of petroleum products. Imperial refines raw hydrocarbons into about 650 petroleum products essential to consumers and businesses: gasoline, diesel, heating oil, natural gas, lubricants, and chemicals used to make plastics.

Like you, Imperial Oil is concerned about the effects of chemicals on health and the environment and we have integrated Responsible Care® into our business practices. Imperial offers products and services to consumers across Canada as well as in export markets.  

In total, we manufacture and sell about a quarter of the petroleum products used every day by Canadians.  We are a leading marketer of fuels, lubricants, asphalts and specialty products.

Key Investment Data

  • Ticker: TSE:imo
  • Sector: Energy
  • Industry: Oil & Gas Integrated
  • Market Cap: 43.77B
  • Market Cap Group: Large Cap
  • P/E: 8.85
  • Dividend Yield: 2.54%

3. Suncor

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.

Suncor Energy 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: 57.82B
  • Market Cap Group: Large Cap
  • P/E: 7.21
  • Dividend Yield: 4.66%

4. Whitecap Resources

Whitecap Resources Inc. is an oil-weighted growth company. It is a clean Canadian energy company focusing on the acquisition, development, and production of oil and natural gas assets in Western Canada.

The company has a low decline light oil asset base and 2,895 drilling locations in British Columbia, Alberta, and Saskatchewan. It is the active seller and shipper on six oil feeder pipelines connected to Enbridge mainline.

Whitecap Resources has a presence in West Central Alberta, Northwest Alberta and British Columbia, Southeast Saskatchewan, West Central Saskatchewan, and Southwest Saskatchewan.

Key Investment Data

  • Ticker: TSE:wcp
  • Sector: Energy
  • Industry: Oil & Gas E&P
  • Market Cap: 5.81B
  • Market Cap Group: Mid Cap
  • P/E: 6.44
  • Dividend Yield: 7.60%

5. Tourmaline Oil

Tourmaline Oil Corp. is a Canadian oil and natural gas exploration and production company. Tourmaline started operations in 2008 and is focused on long-term growth through an aggressive exploration, development, production and acquisition program in the western Canadian sedimentary basin.

With a transportation infrastructure in three core long-term growth areas – the Alberta Deep Basin, the Northeast British Columbia (NEBC) Montney complex and the Peace River Triassic Oil complex - Tourmaline is well-positioned to grow in these three core long-term growth areas.

Management believes Tourmaline has a number of competitive advantages that management expects will help the Company successfully execute its long-term business strategy including:

Key Investment Data

  • Ticker: TSE:tou
  • Sector: Energy
  • Industry: Oil & Gas E&P
  • Market Cap: 23.45B
  • Market Cap Group: Large Cap
  • P/E: 22.86
  • Dividend Yield: 1.56%