The energy market continues to experience severe fluctuations, with high interest rates, inflation, and geopolitical factors exerting pressure on the sector. Apart from macro-level factors, many Canadian energy stocks also face company-specific uncertainties in the Canadian stock market, requiring risk-averse investors to exercise caution.
However, some Canadian energy stocks have mitigated industry and market volatility through their own strength, demonstrating not only stability but also the potential for a bullish market in 2024.
Parkland Corp (TSX:PKI), headquartered in Calgary, is a fuel retailer established in 2002, with a current market capitalization of 8 billion Canadian dollars. Its business includes retail sales, commercial sales, petroleum transportation, and fuel production.
Recently, the boardroom battle between the company and activist investors has intensified. Prior to this, two board members of Parkland resigned and joined the company’s largest shareholder, Simpson Oil. Subsequently, Engine Capital sent a letter this week expressing the hope that Parkland would avoid costly litigation with Simpson Oil and instead focus on a major board overhaul. The reform plan is not to be chosen by the existing board members but rather to be restructured under the leadership of the major shareholders. Over the past year, activists have been demanding that the company sell or divest its refining assets to become a more focused fuel and convenience store retailer.
As of now, the future of this Canadian energy stock, Parkland, remains highly uncertain, making it seem unnecessary to take on this risk.
The Canadian energy sector has many good stocks, with a great deal of diversification, and many energy stocks combine growth and value, such as the analyst-favored Canadian natural gas stock, ARC Resources Ltd (TSX:ARX).
The company’s stock price has risen by 21% over the past year, reaching a market capitalization of 12.3 billion Canadian dollars. Yet, it still maintains a price-earnings ratio of only 7, providing substantial value investment opportunities. In terms of growth potential, ARC Resources demonstrates strong organic growth capability while maintaining sufficient financial flexibility to continually increase capital returns. The stock currently offers a dividend yield of 3.32%. Moreover, with the arrival of the February earnings season, investors will gradually and undoubtedly recognize the potential of this Canadian energy stock, which may become another catalyst for its rise.
In the midst of severe market fluctuations, in 2023, ARX has proven itself. With a soft landing predicted for 2024, the stock has even greater potential for growth in the near future.