Investing in oil stocks can be profitable as the world’s thirst for oil continues to grow. However, with so many options available, it can be overwhelming to determine which stocks to invest in. This is particularly true for those who are interested in Canadian oil stocks.
You’re in luck if you want to invest in Canadian oil stocks. Canada has a wealth of natural resources, including oil, and is home to some of the world’s largest oil companies. In this article, we’ll look at the best Canadian oil stocks to invest in and what makes them stand out.
Whether you’re a seasoned investor or just starting, this guide will provide valuable insight into the Canadian oil industry and help you make informed investment decisions.
Why Invest in Oil Stocks in Canada?
Investing in oil stocks in Canada can provide investors with exposure to the energy sector, which has historically been a significant contributor to the Canadian economy. Here are some reasons why investors may consider investing in oil stocks in Canada:
- Diversification: Investing in oil stocks can help diversify an investor’s portfolio by providing exposure to a different sector and asset class. This can help reduce overall risk in the portfolio.
- Income: Many oil companies in Canada pay dividends to shareholders, providing investors with a stable source of income. The energy stocks Canada has have traditionally been a reliable source of dividend income, as many companies generate strong cash flows from their operations.
- Global demand: The global demand for oil and gas is expected to continue to grow over the long term, driven by population growth and increasing levels of industrialization in developing countries. This demand can support oil prices and, therefore, oil stocks.
- Resource-rich country: Canada has significant oil and gas reserves, making it a major player in the global energy market. This can provide investment opportunities in upstream (exploration and production) and downstream (refining and distribution) segments of the energy value chain.
However, it’s important to note that investing in oil stocks also carries risks, such as commodity price fluctuations, geopolitical risks, and environmental risks.
Best Canadian Oil Stocks
Here are 10 Canadian company stocks that could give exposure to oil production or refinement in Canada, along with a brief explanation of why each could be a good investment:
Canadian Natural Resources Limited (CNQ.TO)
Canadian Natural Resources is Canada’s leading oil and gas exploration and production company. The company has a strong balance sheet and has been increasing its production capacity through strategic acquisitions and investments in technology.
Suncor Energy Inc. (SU.TO)
Suncor Energy is one of Canada’s largest integrated oil and gas companies, with operations spanning exploration, production, refining, and marketing. The company has a diversified portfolio of assets and has been investing in new technologies to reduce its carbon footprint.
Imperial Oil Limited (IMO.TO)
Imperial Oil is a leading integrated oil and gas company in Canada, with operations spanning exploration, production, refining, and marketing. The company has a strong balance sheet and a diversified portfolio of assets, including significant oil sands operations.
Cenovus Energy Inc. (CVE.TO)
Cenovus Energy is an integrated oil and gas company in Canada with operations spanning exploration, production, refining, and marketing. The company has a strong balance sheet and has been increasing its production capacity through strategic acquisitions and investments in technology.
Husky Energy Inc. (HSE.TO)
Husky Energy is an integrated oil and gas company in Canada with operations spanning exploration, production, refining, and marketing. The company has a diversified portfolio of assets, including significant oil sand operations, and has been investing in new technologies to improve its operational efficiency.
Pembina Pipeline Corporation (PPL.TO)
Pembina Pipeline is Canada’s oil and gas industry’s leading transportation and midstream service provider. The company owns and operates a network of pipelines and facilities that transport, store, and process oil and gas. The company has a stable cash flow and has been expanding its operations through strategic acquisitions.
Enbridge Inc. (ENB.TO)
Enbridge is Canada’s leading energy transportation and distribution company, with operations spanning pipelines, gas distribution, and renewable energy. The company has a strong balance sheet and a diversified portfolio of assets, including significant pipelines transporting crude oil and natural gas.
Keyera Corp. (KEY.TO)
Keyera is a leading independent midstream energy company in Canada, with operations spanning transportation, storage, and processing of natural gas, crude oil, and natural gas liquids. The company has a strong balance sheet and has invested in new infrastructure to meet the growing service demand.
TC Energy Corporation (TRP.TO)
TC Energy is a leading energy infrastructure company in North America, with operations spanning pipelines, power generation, and storage. The company has a diversified portfolio of assets, including significant pipelines transporting crude oil and natural gas. In addition, the company has a stable cash flow and has been expanding its operations through strategic acquisitions.
Canadian Western Bank (CWB.TO)
Canadian Western Bank is a regional bank in Western Canada with significant oil and gas industry exposure. The bank provides financing and other financial services to companies in the industry and has a strong track record of growth and profitability.
What’s the largest oil company in Canada?
The largest oil company in Canada is Suncor Energy Inc. Suncor is an integrated energy company that operates in both the upstream (exploration and production) and downstream (refining and marketing) oil and gas industry segments. The company is headquartered in Calgary, Alberta, and operates in Canada and internationally. Suncor’s oil sands operations in northern Alberta are among the largest in the world and are a significant source of the company’s production.
How to Invest in Oil Stocks in Canada:
There are several ways to invest in oil stocks in Canada. Here are some of the most common methods:
Direct stock purchase: Investors can purchase stocks of individual oil and gas companies listed on Canadian exchanges, such as the Toronto Stock Exchange (TSX) or the TSX Venture Exchange. Examples of large oil and gas companies in Canada include Canadian Natural Resources, Suncor Energy, and Enbridge.
Exchange-traded funds (ETFs): ETFs expose investors to a diversified portfolio of oil and gas companies. Some ETFs focusing on the Canadian energy sector include the iShares S&P/TSX Capped Energy Index ETF and the BMO Equal Weight Oil & Gas Index ETF.
Mutual funds expose investors to a diversified portfolio of oil and gas companies managed by professional fund managers. Some examples of mutual funds that invest in the Canadian energy sector include the RBC Global Energy Fund and the Fidelity Global Natural Resources Fund.
Futures contracts: Investors can trade futures contracts for crude oil and natural gas on commodity exchanges, such as the New York Mercantile Exchange (NYMEX) or the Intercontinental Exchange (ICE).