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.
With natural gas prices near yearly highs and oil prices continuing to face challenges, analysts expect this trend to continue through 2025. It is expected natural gas demand is boosted by the expected growth in natural gas-fired power generation due to the increasing demand for electricity from new AI data centres.
Meanwhile, given the expected weak demand from China and increasing supply from non-OPEC countries, including the US and Canada. The medium-term outlook for the oil market is less optimistic, although the escalation of the conflict in the Middle East could quickly push prices higher.
In current market conditions, energy investors should consider stocks of large companies that can pay stable dividends, and here are three Canadian energy stocks to consider.
Suncor (TSX:SU) is known for producing oil sands, but the company also owns refineries that convert crude oil into gasoline, diesel, jet fuel, plastics and bitumen. In addition, the company operates Petro-Canada retail stations. Refineries and petrol stations are referred to as downstream operations and provide a good hedge against lower margins in the production business as a result of lower oil prices.
Suncor is well on its way to turning a profit in 2024. Refinery capacity is nearing saturation as costs fall and production grows. Slower consumer adoption of electric vehicles will prolong demand for petrol and diesel. And with airlines adding aircraft and routes, jet fuel demand will remain strong.
Suncor recently announced a 5 per cent dividend increase. The share prices have retreated from a high of C$58 over the past two weeks, and investors who buy this energy stock at the current price can earn a 4.2% dividend yield.
With a current market capitalisation of C$71.5 billion, TC Energy (TSX:TRP) is one of Canada’s largest energy infrastructure companies, making it a good fit for conservative investors looking for a steady and reliable return on their investments.
Compared to the 22% year-to-date gain in the broader TSX Composite Index, this energy stock is up more than 46% this year, far outperforming the broader market. And its annualised dividend yield is 4.8%.
The company’s management recently outlined several key initiatives that are likely to accelerate growth over the next few years, announcing four new projects with combined capital expenditures of C$1.5 billion.
As demand for natural gas and nuclear power generation continues to grow, these projects will put TC Energy in an even better position to benefit from North America’s growing energy needs. It is worth pointing out that the company’s Southeast Gateway pipeline project, which will be in commercial operation by mid-2025, has already achieved significant cost optimisation, with expenditures 11% lower than previously anticipated. Given these positive developments, TC Energy is well positioned to continue to deliver solid returns to investors in the years ahead.
Canadian Natural Resources (TSX:CNQ) is Canada’s leading natural gas producer and an oil giant with production operations spanning a wide range of hydrocarbons, including oil sands, conventional heavy oil, conventional light oil, offshore oil, LNG and natural gas.
The company recently announced the acquisition of Chevron’s assets in Alberta for C$6.5 billion. The acquisition will increase revenues and reserves, while the expected cash flow growth will support the board’s ability to increase the dividend to shareholders by 7% in 2025. Investors who buy CNQ stock at the current price receive a 4.9% dividend yield. With shares of this energy stock down about 7% over the past six months, investors can take advantage of the opportunity to buy the dip.
