3 of the Best Canadian Energy Stocks to Buy for All Types of Investors

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Having adequate exposure to the energy sector is always essential. Not only is energy one of the largest sectors of the Canadian economy, but energy is also crucial for the global economy to grow. Plus, because energy is one of the few industries benefitting from the current environment, there’s no question that Canadian energy stocks are some of the best investments to buy now.

There were already many inflationary forces impacting the economy as we began 2022. However, the impact on energy markets due to the Russian invasion of Ukraine is affecting global economies the most.

And yet, as energy supplies are impacted, energy demand continues to grow all the time. Therefore, owning high-quality and long-term energy stocks are some of the best investments to make today.

Several energy stocks have even pulled back from their recent highs, making these stocks even more attractive to buy now.

The industry as a whole, though, while it can be defensive, and energy is essential, there are still plenty of higher-risk and higher-growth stocks to consider.

If you’re looking to increase your energy exposure and buy these Canadian stocks while they offer such significant potential, here are three of the best for every type of investor.

Dividend investors: Here is a resilient, high-yield stock to buy and hold

The majority of energy stocks in Canada are engaged in the exploration and production of oil and gas. However, there are also energy infrastructure stocks, such as Enbridge (TSX:ENB)(NYSE:ENB), which make excellent long-term investments.

Enbridge has a massive portfolio and is crucial to the North American economy. Nearly a third of all the oil produced in North America is transported by Enbridge. Plus, it also transports a fifth of the natural gas used in the United States, owns a utility business, energy storage facilities, and even has a growing green energy segment.

Because the stock and its profitability are impacted much less by the price of oil and gas, Enbridge is a safer, more defensive stock for investors looking to gain exposure to the industry.

In addition, because it’s constantly bringing in tonnes of cash flow, the company is one of the best energy stocks to buy for dividend investors. Today the stock offers a yield of more than 6% and has increased that dividend every year for more than a quarter century.

One of the best Canadian energy stocks to buy for an attractive mix of growth and income

Another stock that pays an attractive dividend but is also slightly more volatile than Enbridge is Freehold Royalties (TSX:FRU).

Therefore, Freehold is a stock for investors that can stomach more risk. Although, similar to Enbridge, it offers a high yield, currently at 7.5%, Freehold will experience more volatility due to its exposure to energy prices.

Freehold doesn’t actually produce any energy itself. Instead, it receives a royalty from other energy companies that use its land for producing oil and gas. However, its revenue is still impacted by the price of commodities.

Despite its higher volatility, though, Freehold is still a great stock to buy and hold for the long haul and one of the best Canadian energy stocks to buy now.

One of the best long-term investments to make

Of course, a lot of the focus lately has been on traditional energy stocks since oil and gas prices skyrocketed in 2022. However, these issues that economies around the globe are facing, caused by a shortage in commodities, could also be helped by more renewable energy.

That’s why some of the best Canadian energy stocks to buy now are renewable energy businesses like Northland Power (TSX:NPI).

Renewable energy has many benefits. One of the only reasons why we don’t use more is that there are few of these assets. But with climate change increasingly becoming a problem that needs to be addressed, green energy stocks are some of the best long-term growth stocks to buy now due to their decades of growth potential.

Plus, a stock like Northland is already benefitting from the current environment, and it has several projects that will come online over the next few years.

Therefore, if you’re looking for the best Canadian energy stocks to buy now, Northland is one to keep your eye on.

The post 3 of the Best Canadian Energy Stocks to Buy for All Types of Investors appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Enbridge?

Before you consider Enbridge, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2022 … and Enbridge wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 27 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks
* Returns as of 8/8/22

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Fool contributor Daniel Da Costa has positions in ENBRIDGE INC, FREEHOLD ROYALTIES LTD., and NORTHLAND POWER INC. The Motley Fool recommends Enbridge and FREEHOLD ROYALTIES LTD.