Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
For Canadian investors with some risk tolerance, a small portion of the capital can be placed in quality growth stocks for long-term wealth growth. On the Toronto Stock Exchange, a number of energy stocks with strong dividends are being favoured by analysts to consider buying in August due to their strong fundamentals and financials.
Enerflex (TSX:EFX) is a C$950 million market cap company that provides energy infrastructure and energy transition solutions, including natural gas, low-carbon and water treatment solutions, modular products and integrated custom solutions. The company reported revenues of C$683 million for the first quarter of 2024, up from C$610 million in the same period last year.
However, Enerflex posted a gross profit of C$119 million and a margin of 19 per cent, both down from C$159 million and 28 per cent in the same period last year. The decline in gross profit resulted in Enerflex’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) falling from C$90 million to C$69 million over the past 12 months.
Enerflex aims to improve the profitability of its core business and reduce balance sheet debt, improving financial flexibility in the process. Bay Street analysts expect Enerflex to report adjusted EPS of C$0.60 by the end of 2025 and a loss of C$0.90 per share in 2023, with the stock expected to rise more than 35% over the next 12 months.
Secure Energy Services (TSX:SES), with a current market cap of C$3.8 billion, is engaged in the waste management and energy infrastructure business in Canada and the U.S. In Q1 2024, the company completed the sale of 29 facilities to Waste Connections for C$1.15 billion, repaying the C$800 million senior secured revolving Credit Facility in its entirety.
For the first quarter of the year, Secure Energy Services generated C$108 million or C$0.38 per share in funds flow from operations and C$93 million or C$0.33 per share in free cash flow. The company spent C$15 million on capital expenditures, which will drive future cash flow.
The energy stock pays shareholders a quarterly dividend of C$0.10 per share, which suggests that its 33% dividend payout ratio is quite sustainable. Analysts remain bullish on Secure Energy Services stock, expecting its shares to rise 18% over the next 12 months.
