3 No-Brainer Energy Stocks to Buy Today

In the current market, you have to be quite discerning with energy stocks, especially the ones you want to keep long term, but there are some no-brainer buys with proven histories.

| More on:
oil and natural gas

Image source: Getty Images

The energy sector’s bullish phase is not showing any signs of slowing down. The energy index grew over 93% in the last 12 months, and its growth in 2022 so far has been 33.6%. Since we are only a quarter into the year, the current growth pace is slightly faster than the growth in the last 12 months.

This bullish phase has allowed many previously disregarded energy stocks to shine, and they have shown amazing growth spurts. But you have to be careful with those and naturally suspect their potential once the current momentum wanes. However, there are some no-brainer energy buys that you can hold long-term, and three of them should be on your radar.

A new energy stock

Topaz Energy (TSX:TPZ) has only been around since November 2020. Since it has not yet been tested during an adverse phase for the energy sector here in Canada, its 59% growth since inception might not seem like a very fitting endorsement for Topaz as a long-term holding. But its growth has been very “measured” at a time when many comparable energy stocks (by market cap) were going absolutely berserk.

This should count for something. And if you add the royalty and infrastructure orientation of the company/business model, Topaz seems like a smart energy buy. Its business model is relatively unique, and though the risk might be slightly higher, the upside potential is equivalently enormous.

It’s currently focused on the Western Canadian Sedimentary Basin though it may expand its reach as its acquisitions start paying off.

A safe pipeline company

Pipeline companies like TC Energy (TSX:TRP)(NYSE:TRP) are considered relatively safer compared to other energy companies, especially upstream ones. However, TC Energy’s business model is not the only feather in the company’s cap. Its stock’s performance in the last decade reveals it to be a highly stable stock capable of weathering different kinds of headwinds.

It was one of the few stocks that recovered their 2014 valuation before the post-pandemic driven recovery. And it also didn’t experience rapid growth after the 2020 crash, which would have warranted an equally powerful correction in the future. It’s still trading at a price point quite near its pre-pandemic peak, which has contributed to the juicy 5% yield.

An industrial-oriented energy company

Even though it caters almost exclusively to the energy sector, TerraVest Industries (TSX:TVK) hasn’t suffered from its steady decline after 2014. It also didn’t experience the massive post-pandemic growth spurts that energy stocks, especially smaller ones, experienced, even though it’s a small-cap stock.

Its time-tested capital appreciation potential, reflected in its 1,110% growth in the last decade (equivalent to almost 100% appreciation each year), and its current attractive valuation make it a no-brainer energy stock you can buy right now. It also pays dividends, but the yield pales compared to its growth potential.

Foolish takeaway

The three stocks might also be considered slightly better choices compared to typical energy companies if you consider them through an ESG investing lens, mainly from an environmental perspective. TC Energy is heavily geared toward natural gas, the cleanest fossil fuel we have.

TerraVest has a water-heavy product/service portfolio, and Topaz is essentially a royalty company, so it doesn’t own energy assets directly.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends TerraVest Industries Inc and Topaz Energy Corp.

More on Energy Stocks

oil and gas pipeline
Energy Stocks

Is TC Energy Stock a Good Buy?

TC Energy stock has a lot going for it, but there are also a few red flags to consider before…

Read more »

Canadian energy stocks are rising with oil prices
Energy Stocks

Is Canadian Natural Resources Stock a Good Buy?

CNRL is an energy giant with a market capitalization near $100 billion.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Is Baytex Energy Stock a Good Buy?

Baytex Energy is a TSX stock that has massively underperformed the broader markets in the past decade, but it trades…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Suncor a Buy for its 4.2% Dividend?

Suncor Energy (TSX:SU) has a 4.2% yield. Is it a buy?

Read more »

engineer at wind farm
Energy Stocks

Energy Stocks to Buy Now: Top Picks for Canadian Investors

These companies have a solid business model and growing cash flows to support higher dividend payments and share prices.

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

Is Enbridge Stock a Good Buy?

Enbridge provides a 6.5% dividend yield right now.

Read more »

Oil industry worker works in oilfield
Energy Stocks

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

Suncor stock looks undervalued as the company continues to increases cash flows, earnings, and shareholder returns.

Read more »

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 »