3 Hot Energy Stocks to Add to Your TFSA Today

Oil and gas prices are up and Canadians should look to scoop up red-hot energy stocks like Arc Resources Ltd. (TSX:ARX) and others today.

| More on:

Canadian energy stocks had a hot start to 2021. The oil and gas sector surged on the back of higher prices, which were bolstered by rising demand. This dissipated in the spring and early summer, especially as investors grew concerned with the rise of the Delta variant. Fortunately, this sector has rebounded again on the back of an improved economic outlook and supply issues. Today, I want to look at three energy stocks that are worth adding to your Tax-Free Savings Account (TFSA) at the end of the summer.

It is not too late to buy this surging energy stock in September

Arc Resources (TSX:ARX) is a Calgary-based company that is engaged in the exploration, development, and production of crude oil, natural gas, and natural gas liquids in Canada. Its shares have climbed 66% in 2021 as of early morning trading on September 17. The stock has bounced back quickly from its mid-summer dip. This is an energy stock worth targeting for TFSA investors.

The company unveiled its second-quarter 2021 results on July 29. Arc Resources exceeded its guidance and achieved average daily production of 335,701 barrels of oil equivalent per day. There was a 60/40 split in natural gas, and crude oil and liquids production. Net income rose to $178 million compared to a net loss of $123 million in the second quarter of 2020.

Shares of this energy stock possess a price-to-earnings ratio of 20. That puts Arc Resources in solid value territory relative to its industry peers.

This red-hot stock still offers solid value

Kelt Exploration (TSX:KEL) is another Calgary-based oil and gas company engaged in the exploration, development, and production of crude oil and natural gas resources. This energy stock has surged 125% in 2021. Its shares have soared 144% year over year. TFSA investors can still take advantage of this scorching stock.

In Q2 2021, Kelt Exploration posted petroleum and natural gas sales growth of 33% to $60.6 million. Meanwhile, adjusted funds from operations (AFFO) climbed 151% year over year to $29.4 million. Kelt exploration benefited from its strong cash position and from higher commodity prices. It is well-positioned to take advantage of the broader economic rebound currently underway.

This energy stock last had an attractive P/E ratio of 13, which is much better than the industry average.

One more rising energy stock to snatch up today

Tourmaline Oil (TSX:TOU) is the third oil and natural gas producer I want to focus on today. Like Kelt Exploration, this energy stock has been red hot in recent months. Its shares have climbed 137% in the year-to-date period. The stock has gained huge momentum since falling below the $30 price point in late August.

The company unveiled its second-quarter 2021 results on July 28. It delivered a record-free cash flow of $343 million and strong average production of 410,339 boe/pd. Tourmaline reported net earnings of $668 million for the first six months of 2021 – up from a net loss of $15.7 million for the same period in 2020.

Shares of this energy stock last had an attractive P/E ratio of 9.2. It last paid out a quarterly dividend of $0.17 per share. That represents a 1.6% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Investing

A plant grows from coins.
Tech Stocks

3 Growth Stocks Wall Street Might Be Sleeping on, But I’m Not

Don’t miss your chance to load up on these three beaten-down stocks.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Tuesday, November 5

Updates related to the U.S. presidential election will remain on TSX investors’ radar today as the third-quarter corporate earnings season…

Read more »

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

stock research, analyze data
Bank Stocks

Canadian Bank Stocks: Buy, Sell, or Hold?

There are opportunities and risks on the horizon for the Canadian banks.

Read more »

Young Boy with Jet Pack Dreams of Flying
Stock Market

Is Air Canada Stock a Good Buy After Its Q3 Results

Down almost 60% from all-time highs, Air Canada is an undervalued TSX stock that remains an enticing investment in November…

Read more »

cloud computing
Investing

Where to Invest $10,000 in November

Given their solid underlying businesses and healthy growth prospects, I expect these two defensive stocks to outperform uncertain outlook.

Read more »