My Top 2 Energy Stocks to Buy and Hold Forever

With all the tailwinds the energy industry has at the moment, these two stocks are some of the top energy companies that you can buy now.

| More on:

Energy is one of the most critical industries in our economy, making it an industry that’s crucial to invest in. But like every other industry, some energy stocks are better to buy than others. Similarly, some energy stocks are far riskier than others.

Because many energy stocks can be impacted by commodity cycles, it’s crucial to pick your stocks wisely. The companies that see their profits expand rapidly and share prices gain considerably when commodity prices rise are the same stocks that will likely see major selloffs when the market cycle is going the other way.

So, finding high-quality companies with operations that are critical and highly defensive is an excellent way to ensure you’re buying the best business that you can have confidence owning for the long haul.

Therefore, if you’re looking to add some energy stocks to your portfolio today, here are two of my top stocks to buy now and hold forever.

One of the top Canadian stocks to buy, energy industry or not

One of the best energy stocks in Canada, Enbridge (TSX:ENB)(NYSE:ENB) is, unsurprisingly, one of the largest and most defensive. Because of this size and quality, Enbridge is one of the top energy stocks to buy in this environment and one of the best to hold forever.

Without energy, our economy would cease to exist. So, it goes without saying that the energy industry is essential. And with Enbridge’s massive operations spanning North America, it plays a crucial role in this essential industry.

This makes Enbridge incredibly safe. And because many of the assets that it builds earns the company revenue for years and require little maintenance, Enbridge is constantly bringing in tonnes of cash flow.

This allows Enbridge to increase the dividend each year while continuing to invest in growth. And with much of Enbridge’s current investments going toward green energy, it’s certainly one of the top Canadian energy stocks to buy and hold forever.

And on top of everything else, in this uncertain market environment, the fact that Enbridge stock offers a current yield of 6.1% makes it a highly compelling investment.

An excellent energy stock to own in today’s market environment

If you’re looking for top energy stocks to buy that are more exposed to energy production and have more growth potential, my recommendation is Freehold Royalties (TSX:FRU).

Freehold is a lower-risk energy stock, but it’s crucial to understand that it’s much more exposed to commodity cycles than Enbridge. So, as prices are rising, and as the output of oil and gas in North America increases, Freehold stands to see some significant gains.

This exposure goes the other way, too, though. At the start of the pandemic, much like many other energy producers, Freehold was significantly impacted by the pandemic.

However, it was more than just the falling prices that impacted Freehold. Production curtailments that were put in place due to the limited amount of energy demand in the initial economic shutdowns had a significant impact on Freehold’s financials. However, shutdowns and curtailments that severe were unprecedented at the time and, going forward, are unlikely to happen again to that degree for quite a while.

Freehold offers investors a lower-risk way to gain exposure to the energy industry, and the stock pays out a dividend that yields over 6.5%. If you’re looking to buy top energy stocks now, Freehold is certainly one of the best to consider.

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 Daniel Da Costa owns ENBRIDGE INC and FREEHOLD ROYALTIES LTD. The Motley Fool recommends Enbridge and FREEHOLD ROYALTIES LTD.

More on Energy Stocks

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

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

Valued at a market cap of $55 billion, Imperial Oil pays shareholders a growing dividend yield of 2.4%. Is the…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Where Will Imperial Oil Stock Be in 1 Year?

Imperial Oil is a TSX energy stock that has delivered market-thumping returns to shareholders over the last two decades.

Read more »

Pumpjack in Alberta Canada
Energy Stocks

1 Magnificent Energy Stock Down 17% to Buy and Hold Forever

Down over 17% from all-time highs, Headwater Exploration is a TSX energy stock that offers you a tasty dividend yield…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Cenovus Energy Stock a Good Buy?

Cenovus Energy (TSX:CVE) stock is primed for capital gains and strong total returns in 2025, driven by strategic buybacks and…

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

2 High-Yield Dividend Stocks That are Screaming Buys Right Now

Natural gas stocks like Peyto Exploration and Development are yielding above 7% today and look undervalued as natural gas strengthens.

Read more »

chart reflected in eyeglass lenses
Energy Stocks

Best Stock to Buy Right Now: Canadian Natural Resources vs Cenovus?

Want to invest in Canadian energy? Canadian Natural Resources and Cenovus Energy are two of the largest, but which one…

Read more »

oil pump jack under night sky
Energy Stocks

Where Will Cenovus Stock Be in 1/3/5 Years? 

Let's dive into whether Cenovus (TSX:CVE) stock is worth buying right now and where this stock could be headed over…

Read more »