![](https://i-invdn-com.akamaized.net/content/pica6818b345138887120e03c3215f41f4c.jpg)
Suncor Energy (TSX:SU)(NYSE:SU) and Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) are two of the most solid and conservative energy stocks on the Toronto Stock Exchange.
The recent dips in the large-cap dividend-growth stocks are opportunities to pick up some shares. From their 52-week highs, Suncor stock has retreated about 14%, while Canadian Natural Resources stock has declined about 23%.
Suncor
Suncor is a diversified, integrated energy company with operations in oil sands development and upgrading, offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand.
Suncor has increased its dividend per share for 15 consecutive years. Its five-year dividend-growth rate is about 20%. However, investors should note that occasionally it’ll grow its dividend at a single-digit rate during challenging periods.
For example, in 2011 and 2016, the stock only increased its dividend by about 7% and 2%, respectively. However, those proved to be some of the best times to pick up the stock.
At about $47.20 per share as of writing, Suncor offers a yield of about 3% and 12-month upside potential of about 30%, according to the analyst consensus from Thomson Reuters.
Canadian Natural Resources
Canadian Natural Resources is a large oil and gas producer with a production mix as follows: about 38% in oil sands mining and upgrading, about 25% in heavy crude oil, about 25% in natural gas, and about 12% in light crude oil and natural gas liquids.
Canadian Natural Resources has increased its dividend per share for 17 consecutive years. Its five-year dividend-growth rate is about 21%. Notably, it’ll occasionally grow its dividend at a low single-digit rate during challenging periods.
For example, in 2015 and 2016, the stock only increased its dividend by about 2%. However, those proved to be some of the best periods to buy the stock.
At about $37.30 per share as of writing, Canadian Natural Resources offers a yield of about 3.6% and 12-month upside potential of about 50%, according to the analyst consensus from Reuters.
Investor takeaway
Suncor and Canadian Natural Resources are investment-grade companies with S&P credit ratings of A- and BBB+, respectively. Although they are large-cap and conservative ideas within the energy industry, their stocks are still volatile.
Simply look at their long-term price charts to get an idea. So, even though they look cheap, it’s more prudent to build a position over time. When they increase their dividend at a small rate, investors should consider backing up the truck for stronger returns.
If I had to buy one of the two today, I’d go with Canadian Natural Resources, which offers a bigger dividend yield and more near-term upside potential, despite the fact it’s riskier due to being more tied to the volatility of commodity pricing.
Fool contributor Kay Ng has no position in any of the stocks mentioned.