Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

2 Canadian Energy Stocks for Market-Beating Returns

Stock Markets Jun 18, 2022 09:15
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. 2 Canadian Energy Stocks for Market-Beating Returns

The broader Canadian stock market has not been doing well lately amid high inflation, interest rate hikes, and rising geopolitical tensions. The S&P/TSX Composite Index is down by 3.17% year to date at writing, reflecting the equity market’s state. However, it isn’t the entire stock market that is going through a major downturn.

The Canadian energy industry has benefited greatly from the geopolitical tensions and rising commodity prices. The S&P/TSX Capped Energy Index represents a market capitalization-weighted collection of the top Canadian energy stocks. The index is up by a massive 66.27% year to date.

It is a very good time to own energy stocks on the TSX. Today, I will discuss two Canadian energy stocks you could consider adding to your portfolio to leverage the high energy demand and enjoy potentially stellar profits in the coming weeks.

ARC Resources ARC Resources (TSX:ARX) is a $14.63 billion market capitalization Canadian energy company headquartered in Calgary. The independent energy company is engaged in the acquisition, exploration, development, and production of oil and natural gas through conventional methods in Western Canada.

It is Canada’s third-largest natural gas producer and managed to generate substantial cash flows, thanks to the tailwinds propelling the energy industry.

ARC Resources stock trades for $21.47 per share at writing, and it boasts a 2.24% dividend yield. Its share prices are up by almost 80% year to date, and it looks well positioned to soar further in the coming months. It could be an excellent addition to your portfolio at current levels.

Cenovus Energy Cenovus Energy (TSX:TSX:CVE)(NYSE:CVE) is a $60.54 billion market capitalization Canadian integrated oil and natural gas company. Headquartered in Calgary, it might not be the largest integrated energy player in Canada. But that factor could be the very reason it is an attractive asset to consider.

The stock does not offer much in terms of shareholder dividends. However, its management has been using as much of its cash flow as possible to pay down its debt and improve its fundamentals. It has already increased its base dividends by 300%, and more dividend hikes could follow.

Cenovus Energy stock trades for $30.70 per share at writing, and it boasts a 1.37% dividend yield. Its share prices are up by an astonishing 88% year to date, and it does not look like its upward momentum will slow down anytime soon. It could be a steal for your portfolio, even after such stellar gains so far this year.

Foolish takeaway Canadian investors have plenty of reasons to be bullish on energy stocks. The embargoes imposed against Russia due to its war with Ukraine have disrupted global oil and natural gas supplies, leading to substantial uncertainty worldwide. Many of the largest oil and gas producers cannot increase production to meet demand due to environmental concerns.

The demand for energy products will likely keep increasing in the coming weeks and months because the world is moving into a post-pandemic era. High energy demand will require more producers to step up, and that could result in more profitability for smaller energy players.

ARC Resources stock and Cenovus Energy stock are not the biggest players in the Canadian energy industry. It could be the very reason these two companies could be attractive additions to investor portfolios at current levels.

The post 2 Canadian Energy Stocks for Market-Beating Returns appeared first on The Motley Fool Canada.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

This Article Was First Published on The Motley Fool

2 Canadian Energy Stocks for Market-Beating Returns
 

Related Articles

China, Australia Stocks Rattled by new COVID Lockdown
China, Australia Stocks Rattled by new COVID Lockdown By Investing.com - Aug 12, 2022

By Ambar Warrick  Investing.com-- Chinese and Australian stocks fell on Friday as a COVID-19 lockdown in commodities hub Yiwu rattled sentiment, while most other Asian stocks...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email