Energy demand is rising amid intense economic activity, an increasing population, and growing income levels. Rising demand could benefit energy companies, boosting their financials and stock prices. Many of these energy companies reward their shareholders through dividends and share repurchases. Against this backdrop, let’s look at three top energy stocks you can buy now.
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Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is an oil and natural gas producer that operates primarily in Western Canada, the North Sea, and Offshore Africa. The company’s financials have been solid, given its well-diversified and balanced asset base, low-risk and high-value reserves, and effective and efficient operations. Supported by solid financials, the integrated energy company has raised its dividends for 25 years at an annualized rate of 21% and currently offers a healthy dividend yield of 4.5%.
Moreover, oil prices have strengthened over the last few weeks amid supply concerns as investors fear that the new sanctions by the United States could disrupt Russian exports to China and India. Higher oil prices could benefit oil-producing companies, such as CNQ. Further, the company has strengthened its asset base by acquiring Chevron Canada Limited’s Alberta assets. Also, the company has planned for an operating capital budget of $6 billion this year. Amid these growth initiatives, the company expects its 2025 average production to grow 12%. So, higher oil prices and increased production could boost its financials and stock price, thus making it an excellent buy.
Suncor Energy
Second on my list would be Suncor Energy (TSX:SU), an integrated energy company with oil sands development, offshore oil production, petroleum refining, and production and upgrading operations. The company has posted a record annual production of 827,000 bbls/d (barrels of crude oil per day) in 2024, representing a 10.9% increase from the previous year. Also, its refinery utilization rate stood at 100%, higher than the management’s 92–96% guidance.
Besides, Suncor Energy is continuing with its three-year plan, which would add 100,000 bbls/d of production between 2023 and 2026. The company has also taken several initiatives to cut costs and improve productivity, which could lower its WTI (West Texas Intermediate crude) breakeven prices by US$10/barrel compared to its 2023 levels. In addition to these factors, higher oil prices could boost its financials, thus supporting its stock price growth.
SU stock trades at an attractive NTM (next 12 months) price-to-earnings multiple of 13.1 and offers a healthy dividend yield of 4%. Considering all these factors, I am bullish on Suncor Energy.
Enbridge
Third on my list is a midstream energy company, Enbridge (TSX:ENB), which transports 30% of crude oil produced in North America and 20% of natural gas consumed in the United States. The rising energy demand could increase the company’s asset utilization, thus boosting its financials. Besides, the company recently acquired three utility assets in the United States, making it the largest natural gas utility company in North America.
Further, Enbridge continues to expand its asset base through its $27 billion secured capital program. It expects to put around $6 billion worth of projects into service this year. Amid these growth initiatives, the management expects its 2025 adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to come in between $19.4 billion and $20 billion. The midpoint represents an 11.1% increase from the midpoint of its 2024 guidance. So, its growth prospects look healthy.
Notably, Enbridge has enhanced its shareholders’ returns by raising its dividends for 30 years and currently offers a healthy dividend yield of 5.9%. ENB stock trades at a reasonable NTM price-to-earnings multiple of 21.4, making it an enticing buy.
