2 Top Canadian Energy Stocks to Buy This Fall

Here’s why long-term investors looking for top energy stocks should consider Enbridge (TSX:ENB)(NYSE:ENB) and Suncor (TSX:SU)(NYSE:SU).

| More on:

Finding quality energy stocks to invest in over the past year and just holding steady has been an excellent investing strategy. Indeed, rising energy prices has made energy stocks among the best-performing groups on the TSX since the pandemic hit bottom.

However, the energy sector is one that always seems to be filled with uncertainty. Now is no different.

Let’s dive into two top Canadian energy stocks with long-term potential (and great dividends) to buy right now.

Top energy stocks: Enbridge

When it comes to choosing dividend stocks on the TSX, Enbridge (TSX:ENB)(NYSE:ENB) has been one of my top picks for quite some time. Indeed, few other large-cap stocks offer a yield as high as 6.6%. That’s a key component for long-term investors looking to own Enbridge stock to consider.

However, it’s also important to consider how Enbridge is able to pay out this high yield.

For one, the company has pretty much always paid out a relatively high yield. That’s because Enbridge has been diligent about returning value to shareholders over the years, hiking its dividend. While this is expected to continue in the years to come, Enbridge is likely to tone down its increases. The company plans on reinvesting its growing cash flows into its existing infrastructure, providing even more stable returns over time to investors.

The pipeline operator’s Line 3 expansion project has been a highly contentious one. That said, it’s set to be online this year, offering Enbridge capacity of 620,000 barrels per day. This is markedly higher than the previous Line 3, providing even more cash flow growth on top of the company’s expected gains this year.

Suncor

Moving upstream in the energy supply chain, Suncor (TSX:SU)(NYSE:SU) is one of the best energy stocks in Canada. An oil sands-focused company, Suncor has benefited from decades of investment in this sector from the Canadian government.

However, given the climate concerns around oil sands production as well as the impact of lower energy prices on the sector overall, Suncor stock has waned in recent years. Investors who may be enticed by the company’s otherwise impressive 3.5% dividend yield may be dissuaded by Suncor’s growth prospects moving forward.

That said, I think there’s a lot to like about Suncor in this environment. It’s one of the top energy stocks that’s able to pass on higher energy prices to shareholders. Smaller midstream players can’t do this. Suncor’s operating leverage and ability to scale are hard to beat in this sector. Indeed, from a business standpoint, there’s a lot to like about Suncor’s positioning.

Sure, risks exist with Suncor stock. All energy stocks carry somewhat similar risks in this regard. However, I think Suncor’s size and cash flow stability are hard to beat for those looking at energy producers right now.

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 Chris MacDonald has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.

More on Energy Stocks

construction workers talk on the job site
Energy Stocks

Best Stock to Buy Right Now: Baytex vs Suncor?

Suncor and Baytex stocks both look like solid companies offering growth and dividends. But which is the better buy?

Read more »

bulb idea thinking
Energy Stocks

3 Incredibly Cheap Energy Stocks to Buy Now

Energy stocks are trending upwards on the back of several key factors. And these three continue to be top cheap…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Should You Buy Freehold Royalties Stock for its 8% Yield?

Freehold Royalties is a TSX dividend stock that offers shareholders a forward yield of 8%. But is the energy stock…

Read more »

Muscles Drawn On Black board
Energy Stocks

Is Suncor Energy Stock a Good Buy?

Suncor is on a roll in 2024. Are more gains on the way?

Read more »

profit rises over time
Top TSX Stocks

3 Reasons to Buy Enbridge Like There’s No Tomorrow

Have you considered buying Enbridge (TSX:ENB)? Here are 3 reasons to buy Enbridge today for lasting growth and income.

Read more »

oil pump jack under night sky
Energy Stocks

Is CNQ Stock a Buy for its 4.5% Dividend Yield?

CNQ stock is one of the best options out there for dividend growth. But what about value? Let's take a…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Imperial Oil Stock a Buy, Sell, or Hold for 2025?

Imperial Oil stock is in a precarious position, so what should investors consider as we head nearer to 2025?

Read more »

construction workers talk on the job site
Energy Stocks

Is Suncor Stock a Buy, Sell, or Hold for 2025?

Suncor Energy stock is trading at its decade-high on uncertainty in the oil market. Should you buy, sell, or hold…

Read more »