15 Best Energy Stocks In Canada (Sep 2022): Oil, Gas, and More

When it comes to energy sources, Canada is quite fortunate. It has the fourth-largest oil reserves and third-largest uranium reserves.

It’s the third-largest hydropower producer in the world, and over 60% of the country’s power comes from water, which has contributed to it becoming one of the top ten green countries in the world.

This diversity and range are also reflected in publicly traded energy companies, especially if we add electrical energy to the mix. You have a pretty decent range of best energy stocks in Canada to invest in.

Energy Stocks In Canada

For the list below, I am going with a relatively broad definition of the word “energy.” Conventionally, the term energy stock refers mainly to oil and gas/fossil fuel companies and businesses that exclusively serve this market.

But a broader and relatively more accurate description of energy businesses would also include companies that focus on electrical energy, i.e., its production and distribution.

That includes renewable energy companies that focus on power generation sources other than conventional energy (oil or natural gas).

The collective pool of conventional energy stocks and what’s officially classified as utilitiey stocks is quite sizeable and offers Canadian investors a wealth of dividend and growth options.

Best Oil And Gas Energy Stocks In Canada

1. Enbridge Stock

Enbridge Stock
  • Ticker: ENB.TO
  • Industry Niche: Pipeline/Energy Transportation
  • Forward Dividend Yield: 6.16%
  • Dividend Payout Ratio: 140.66%
  • Dividend Yield (12-Month Trailing): 6.28%
  • Upcoming Dividend Date: Sep 01, 2022
  • Market Cap: $109.44 Billion
  • Forward P/E Ratio: 17.55
  • Average Analyst Rating: 2.3 - Buy

Enbridge is an energy giant, not just in Canada but also in North America. It’s responsible for moving a sizeable chunk of the natural gas and oil used in the region through its extensive pipeline network that connects the US and Canada.

It’s also in the natural gas distribution business and caters to about 3.8 million customers.

Its massive and well-positioned infrastructure allows it to leverage debt more effectively, and it’s already engaging in future-facing green projects like renewables (1.8 GW already contracted) and hydrogen.

From an investment perspective, Enbridge’s core strength as one of the best energy stocks in Canada is its dividends.

It’s one of the most generous dividend aristocrats and has repeatedly proven that it can raise dividends no matter how bleak the energy sector’s condition is.

2. Canadian Natural Resources Stock

Canadian Natural Resources Stock
  • Ticker: CNQ.TO
  • Industry Niche: Energy Producer  
  • Forward Dividend Yield: 4.45%
  • Dividend Payout Ratio: 26.56%
  • Dividend Yield (12-Month Trailing): 3.68%
  • Upcoming Dividend Date: Oct 05, 2022
  • Market Cap: $79.12 Billion
  • Forward P/E Ratio: 6.79
  • Average Analyst Rating: 2.2 - Buy

Canadian Natural Resources is all about energy production (oil and natural gas). It has a robust portfolio of assets, and its production capacity makes it one of the largest natural gas and heavy crude oil producers in Canada.

It’s surprisingly low debt for a company of its size. It also has an extensive oil sands presence and world-class assets.

Its diverse portfolio of energy products and stable financials have resulted in a stable stock and one of the few that weren’t decimated after the 2015 crash.

It’s also a generous dividend aristocrat that offers a healthy yield in the right market conditions, and excellent capital appreciation potential.  

3. TC Energy Stock

  • Ticker: TRP.TO
  • Industry Niche: Natural Gas Transportation   
  • Forward Dividend Yield: 5.75%
  • Dividend Payout Ratio: 110.28%
  • Dividend Yield (12-Month Trailing): 5.65%
  • Upcoming Dividend Date: Oct 31, 2022
  • Market Cap: $63.26 Billion
  • Forward P/E Ratio: 14.5
  • Average Analyst Rating: 2.8 - Hold

TC Energy is another major pipeline company in Canada, and though it transports both natural gas and liquids, the natural gas pipeline network is 19x the size of the liquid one.

This allows it to transport a quarter of the total natural gas consumed in North America. The pipeline network stretches out to Mexico.

It also has a sizeable presence in the power generation business and has the production capacity to power over 4 million homes.

The heavy reliance on natural gas makes it a slightly better long-term investment compared to the more oil-centric energy peers. Its long-term capital appreciation potential is quite decent as well and perfectly complements its usually high yield.

4. Suncor Stock

Suncor Energy Stock
  • Ticker: SU.TO
  • Industry Niche: Integrated Energy Company  
  • Forward Dividend Yield: 4.79%
  • Dividend Payout Ratio: 23.28%
  • Dividend Yield (12-Month Trailing): 3.72%
  • Upcoming Dividend Date: Sep 26, 2022
  • Market Cap: $55.57 Billion
  • Forward P/E Ratio: 5.15
  • Average Analyst Rating: 2.5 - Buy

While Suncor is better known for its association with oil sands, it’s a fully integrated energy company covering the whole downstream, midstream, and upstream spectrum.

It has been engaged in developing one of the world’s largest resource basins with a decent reserve life index (29 years from 2022). On the other end (from production), it has a network of 1,875 gas stations (under the name Petro Canada).

Suncor is a strong dividend stock, though it took a break from being an aristocrat and actually slashed its dividends during the pandemic.

5. Keyera Stock

Keyera Stock
  • Ticker: KEY.TO
  • Industry Niche: Midstream Services
  • Forward Dividend Yield: 6.11%
  • Dividend Payout Ratio: 86.70%
  • Dividend Yield (12-Month Trailing): 6.33%
  • Upcoming Dividend Date: Oct 17, 2022
  • Market Cap: $6.69 Billion
  • Forward P/E Ratio: 15.44
  • Average Analyst Rating: 2.1 - Buy

Keyera is a midstream energy company with a focus on Natural Gas Liquids (NGL). It also works with Propane, Butane, Iso-Octane, and Condensate. Its liquid infrastructure includes storage facilities (17 underground caverns) and transportation (railroad, pipeline, and trucks).

It has four major projects to its name, three of which are associated with natural gas processing.

Despite being a relatively more minor player (by market cap) compared to other large-cap energy companies on this list, Keyera can be considered a stable holding. It’s a better buy for its dividends than its capital appreciation potential.

6. Topaz Energy Stock

Topaz Energy Stock
  • Ticker: TPZ.TO
  • Industry Niche: Royalty And Energy Infrastructure
  • Forward Dividend Yield: 5.38%
  • Dividend Payout Ratio: 161.67%
  • Dividend Yield (12-Month Trailing): 4.53%
  • Upcoming Dividend Date: Sep 30, 2022
  • Market Cap: $3.02 Billion
  • Forward P/E Ratio: 23.61
  • Average Analyst Rating: 1.8 - Buy

Topaz is slightly unique compared to most other energy stocks on this list. It’s one of the youngest (it started trading in Oct 2020) and focuses on acquisition and royalties.

It already has a strategic partnership with the Calgary-based NGL company Tourmaline Oil.

The stock does pay dividends (as customary for most royalty businesses) and has quite a generous yield.

However, its capital appreciation potential has not yet been judged during a crisis or a major bearish phase.

But if the energy sector remains strong over the next decade and Topaz sticks to quality acquisitions, it can offer great value and growth prospects to shareholders.  

7. TerraVest Industries Stock

Terravest Industries Stock
  • Ticker: TVK.TO
  • Industry Niche: Energy Services And Infrastructure
  • Forward Dividend Yield: 1.68%
  • Dividend Payout Ratio: 20.51%
  • Dividend Yield (12-Month Trailing): 1.67%
  • Upcoming Dividend Date: Oct 11, 2022
  • Market Cap: $429.09 Million
  • Forward P/E Ratio: 30.76

TerraVest is not an oil and gas company though it’s still an energy stock because it caters almost exclusively to the energy market with its B2B business.

Its product portfolio is mostly about energy storage and transportation of ammonia, LPG/NGL, and industrial gas. It creates specialized vessels for energy companies. It also offers well servicing.

It might be due to the industrial lean, but this small-cap stock is among the best growth stocks in the energy sector.

Its growth in the last decade has been both phenomenal and relatively stable, and it’s supported mainly by healthy valuation and financials. So even though it pays dividends, the growth potential gets most of the limelight.

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Best Renewable Energy Stocks In Canada

The best energy stocks in Canada pool become significantly more expansive when you include renewables in the mix.

8. Brookfield Renewable Partners Stock

Brookfield Renewable Partners Stock
  • Ticker: BEP-UN.TO
  • Industry Niche: Renewable Power Platform  
  • Forward Dividend Yield: 3.18%
  • Dividend Yield (12-Month Trailing): 2.47%
  • Upcoming Dividend Date: Sep 29, 2022
  • Market Cap: $30.61 Billion
  • Forward P/E Ratio: 122.26
  • Average Analyst Rating: 2.4 - Buy

Brookfield Renewable Partners is all about acquiring and consolidating renewable energy assets from around the globe, like its parent asset management company.

It focuses on four main asset classes: Hydro, solar, wind, and transition. Hydro leads in the operational part of the portfolio, and wind dominates the development stage assets.

Geographically, the portfolio is adequately diversified, though North America leads.

As an investment, Brookfield offers a healthy combination of dividends and growth.

And even though it doesn’t offer the best of either (yet), the long-term potential of such a diversified renewable-focused company is tremendous. It gets stability and credibility endorsements from its parent company.

9. Algonquin Power & Utilities Stock

Algonquin Power And Utilities Stock
  • Ticker: AQN.TO
  • Industry Niche: Power Generation And Distribution/Utilities
  • Forward Dividend Yield: 5.13%
  • Dividend Payout Ratio: 131.23%
  • Dividend Yield (12-Month Trailing): 4.04%
  • Upcoming Dividend Date: Oct 14, 2022
  • Market Cap: $11.62 Billion
  • Forward P/E Ratio: 15.7
  • Average Analyst Rating: 2.7 - Hold

Algonquin Power and Utilities focuses on both ends of the renewable energy business.

The company has a power generation capacity of about 4 GW (both operational and under construction), and with its utility business, it caters to over one million customers.

However, these utility customers include power, water, and natural gas customers. It has 39 renewable power generation facilities, including wind and hydro.

The stock offers a good combination of capital appreciation potential and dividends.

It also carries the stability inherent in the utility business and the long-term growth potential that comes with a renewable focus.

10. Northland Power Stock

Northland Power Stock
  • Ticker: NPI.TO
  • Industry Niche: Power Generation
  • Forward Dividend Yield: 2.78%
  • Dividend Payout Ratio: 90.91%
  • Dividend Yield (12-Month Trailing): 2.74%
  • Upcoming Dividend Date: Oct 17, 2022
  • Market Cap: $10.06 Billion
  • Forward P/E Ratio: 21.14
  • Average Analyst Rating: 1.9 - Buy

Northland Power is a pure-play power generation capacity that is then contracted out to distribution companies.

Unlike many other renewable energy companies with portfolios that skew heavily towards natural gas, Northland’s power generation mix is more wind-focused (both on-shore and offshore), and it has heavily invested in its offshore wind portfolio.

Even at its current capacity, its Canada’s largest offshore wind power producer and the fourth largest in the world.

The stock so far has been unpredictable. Its growth has mostly been sporadic and driven by a bullish market, but considering its production capacity and portfolio growth projections; the stock might see strong growth in the future.

The dividends yield is usually quite modest.  

11. TransAlta Renewables Stock

TransAlta Renewables Stock logo
  • Ticker: RNW.TO
  • Industry Niche: Power Generation
  • Forward Dividend Yield: 5.19%
  • Dividend Payout Ratio: 218.60%
  • Dividend Yield (12-Month Trailing): 5.8%
  • Upcoming Dividend Date: Sep 29, 2022
  • Market Cap: $4.26 Billion
  • Forward P/E Ratio: 20.2
  • Average Analyst Rating: 3.2 - Hold

Even though it has renewables in the name, about 40% of the cash flow of TransAlta Renewables comes from natural gas (a non-renewable source). It may change in the future as it adds more wind projects to its asset portfolio, which is already dominant.

The portfolio is geographically diversified, and in addition to the US and Canada, the company has production facilities in Australia as well.

A strong point in TransAlta’s favor, especially from a financial and dividend sustainability perspective, is the long contract life of its production facilities (averaged at 12 years).

12. Boralex Stock

Boralex Stock
  • Ticker: BLX.TO
  • Industry Niche: Renewable Power Generation
  • Forward Dividend Yield: 1.33%
  • Dividend Payout Ratio: 115.79%
  • Dividend Yield (12-Month Trailing): 1.46%
  • Upcoming Dividend Date: Sep 16, 2022
  • Market Cap: $4.49 Billion
  • Forward P/E Ratio: 37.65
  • Average Analyst Rating: 2.3 - Buy

Boralex is a Quebec-based pure-play renewable power generation company that currently produces over 80% of its power using wind, and the rest using hydro and solar (and a bit of thermal power from biomass).

However, the future outlook has the company focusing mostly on wind and solar, two of the most long-term sustainable renewables with minimal environmental impact.

It’s also a very internationally focused company, with France and US as its target market (in addition to the domestic one).

13. Innergex Renewable Energy Stock

  • Ticker: INE.TO
  • Industry Niche: Renewable Power Generation
  • Forward Dividend Yield: 3.68%
  • Dividend Yield (12-Month Trailing): 3.72%
  • Upcoming Dividend Date: Oct 17, 2022
  • Market Cap: $3.78 Billion
  • Forward P/E Ratio: 52.91
  • Average Analyst Rating: 2.4 - Buy

Innergex Renewable Energy also owns a portfolio of 100% renewable power assets. It’s owned by the largest power company in Canada (Hydro-Quebec: Crown Corporation).

It has a total of eighty facilities (both power generation and storage) in Canada, the US, France, and Chile. Half the power mix is wind, followed by hydropower, and lastly, solar.

A geographically diversified portfolio of assets and a well-rooted parent company are additional strengths.

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Best Nuclear Energy Stocks In Canada

Canada is rich in uranium, and even though with renewables on the rise and so much hydropower at its disposal, uranium makes up only about 15% of the total power mix, uranium is a major export.

About three-fourths of all uranium produced in the country is exported.  

14. Cameco Stock

Cameco Stock
  • Ticker: CCO.TO
  • Industry Niche: Uranium Production
  • Forward Dividend Yield: 0.37%
  • Dividend Payout Ratio: 53.33%
  • Dividend Yield (12-Month Trailing): 0.22%
  • Upcoming Dividend Date: Dec 15, 2022
  • Market Cap: $14.52 Billion
  • Forward P/E Ratio: 37.17
  • Average Analyst Rating: 1.8 - Buy

Cameco is the world’s largest publicly traded uranium company and the second-largest uranium producer, which is a very strong position, especially if the world decides to refocus on uranium as a transitional source as it evolves towards a zero-carbon future.

It has a massive production capacity, which can be stretched to 53 million pounds of uranium concentrate if need be. That’s more than one-fourth of the entire global demand in 2020.

The company has a geographically diversified portfolio with operations in US and Australia.

15. NexGen Energy Stock

NexGen Logo
  • Ticker: NXE.TO
  • Industry Niche: Low-Cost Uranium Production
  • Forward Dividend Yield: N/A
  • Market Cap: $2.52 Billion
  • Forward P/E Ratio: -87.5
  • Average Analyst Rating: 1.8 - Buy

NexGen is currently focused on developing its Rook I property (which it fully owns) as a low-cost uranium production resource and, at its full capacity, may be able to produce about 15% to 20% of the global uranium supply.

As a development stage company, NexGen can either be a great opportunity or security that weighs down your portfolio based on the global uranium demand dynamics.

If the demand rises and more nuclear plants start coming online, NexGen can see rapid growth, and the stock can grow at a powerful pace.

But if demand starts slumping and renewables keep dominating the scene, the stock may become a liability.

How To Buy Energy Stocks In Canada

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To learn more, check out my full breakdown of the best trading platforms in Canada here.

Conclusion

Best Energy Stocks In Canada

Most of the best energy stocks in Canada, whether it’s conventional, renewable, or nuclear energy, can be healthy long-term holdings in your portfolio.

As a collective asset pool, they offer a great mix of technologies and commodities, including the ones the world is moving away from as well as moving towards.

If you are exclusively interested in oil as an energy commodity, there are some oil stocks and oil ETFs that you should look into.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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