The Best Canadian Oil Stocks – Top Energy Stocks for March 2025

ByDan Kent Published On:

Key takeaways

Diverse Investment Opportunities: Canada’s oil sector offers a range of choices, from upstream producers like Canadian Natural Resources and Tourmaline to midstream operators like Enbridge and TC Energy, allowing investors to tailor their portfolios to their risk and income preferences.

Reliable Dividend Income: Stocks like Enbridge, TC Energy, and Parkland Fuel provide attractive, stable dividends, supported by strong cash flows and long-term contracts, making them ideal for income-focused investors.

Positioning for Energy Transition: While traditional oil and gas remain core operations, companies such as Enbridge and Parkland are investing in renewable energy and cleaner fuels, ensuring relevance in a shifting energy landscape.

3 stocks I like better than the ones on this list.

The economic climate faced by Canadian oil and gas stocks, including pipeline firms, oil makers, and natural gas producers, was like nothing ever seen before.

COVID-19 wreaked havoc on all Canadian energy companies as oil demand plummeted, and cash flow was severely impacted. And as these once-popular Canadian stocks fell, dividend yields rose, and they became attractive opportunities. 

Today, the landscape has shifted. The price of oil and natural gas has stabilized and energy demand overall is lowering due to economic weakness in both Canada and the United States. This has left many energy companies trading at attractive valuations, as sentiment in the industry is being impacted.

Don’t just chase oil and gas stocks for low valuations, however. In my opinion, there are very few high quality companies in the industry. Most are relatively poor capital allocators and have underperformed broader indexes for long stretches of time. When oil booms, the phrase “a rising tide lifts all ships” is certainly applicable.

But during tough economic times, you want producers that can be profitable in any environment.

In this article, I’ll go over some of what I view are the premiere options when it comes to oil and gas stocks today. I’ll not only speak on producers, but also on pipelines and companies that sell gasoline and other petroleum products to consumers.

What are the best Canadian oil stocks to buy today?

Leading fuel distributor and convenience store operator

Parkland Fuel (TSE:PKI)

Parkland Fuel focuses on fuel distribution and retail, operating a network of gas stations and convenience stores across Canada, the U.S., and the Caribbean. The company is also growing its renewable energy offerings, such as biofuels, while leveraging its large-scale logistics infrastructure to remain a key player in the energy transition. Parkland’s integrated business model helps it generate stable cash flows, even during periods of oil price volatility.

P/E: 25.9

5 Yr Revenue Growth: 17.6%

5 Yr Earnings Growth: 11.4%

5 Yr Dividend Growth: 3.0%

Yield: 4.0%

  • Stable cash flow from fuel distribution and convenience store operations.
  • Growth through strategic acquisitions, including expanding into the U.S. market.
  • Early mover in renewable fuels, with increasing investment in biofuels and EV charging.
  • Defensive business model with resilience to oil price fluctuations.
  • Reliable dividend with a current yield of ~4%, supported by steady revenue streams.
  • Diverse geographical footprint reduces reliance on any single market.
  • Renewable Fuels: Parkland’s growing biofuels and EV charging network could secure its position in a cleaner energy future.
  • Acquisition Strategy: Monitor Parkland’s M&A activity, as it drives much of the company’s growth.
  • Convenience Store Expansion: Increased focus on retail operations could improve margins and boost profitability.
  • Fuel Demand Trends: The company’s performance is tied to fuel consumption trends in its key markets.
  • Oil Price Volatility: Although Parkland is insulated from direct price swings, extreme fluctuations could hurt margins.
  • Regulatory Changes: Increasing fuel regulations or carbon taxes could pressure profitability.
  • Competition: Aggressive competition in the retail fuel and convenience store space could limit growth.
  • Economic Slowdowns: Lower travel or fuel demand in recessions could impact revenues.

One of Canada’s largest oil and gas producers

Canadian Natural Resources (TSE:CNQ)

Canadian Natural Resources (CNRL) is a diversified energy producer with operations spanning oil sands, natural gas, and conventional crude oil. Its integrated asset base and low-cost production model make it one of the most efficient operators in Canada. CNRL is also a shareholder favorite for its strong dividend growth history and consistent operational performance, regardless of market conditions.

P/E: 12.0

5 Yr Revenue Growth: 12.0%

5 Yr Earnings Growth: 27.6%

5 Yr Dividend Growth: 21.5%

Yield: 5.0%

  • Low-cost producer with a strong asset base in Canada’s oil sands.
  • Consistent dividend growth with a yield of ~4.5%, supported by robust free cash flow.
  • Significant natural gas production adds diversity to its portfolio.
  • Long reserve life ensures sustainable production for decades.
  • Industry leader in reducing emissions intensity within oil sands operations.
  • Strong balance sheet and history of disciplined capital allocation.
  • Oil Sands Innovation: CNRL is investing in carbon capture and other technologies to reduce emissions from oil sands production.
  • Natural Gas Demand: Rising global demand for natural gas offers a growth avenue for CNRL.
  • Dividend Growth: CNRL’s track record of increasing dividends makes it a favorite for income investors.
  • Commodity Prices: The company’s earnings are closely tied to global oil and gas price trends.
  • Environmental Scrutiny: Oil sands operations face significant opposition due to their carbon footprint.
  • Commodity Price Volatility: Sudden drops in oil or gas prices could impact profitability.
  • Regulatory Changes: Stricter environmental regulations could increase operational costs.
  • Pipeline Constraints: Limited pipeline capacity in Canada can hinder production growth.

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Leading North American pipeline and energy infrastructure company

TC Energy (TSX:TRP)

TC Energy owns and operates an extensive network of pipelines that transport natural gas, crude oil, and liquids across North America. The company also has a growing presence in the power generation sector, including renewable energy projects. With a stable business model driven by long-term contracts, TC Energy provides reliable cash flows and consistent dividend payouts.

P/E: 13.2

5 Yr Revenue Growth: 2.3%

5 Yr Earnings Growth: -7.6%

5 Yr Dividend Growth: 5.3%

Yield: 5.7%

  • Extensive pipeline network critical for North American energy transport.
  • Long-term contracts provide stable and predictable cash flow.
  • Dividend yield of ~7%, making it a top choice for income investors.
  • Growing focus on renewable energy and energy storage solutions.
  • Expansion projects, such as LNG export pipelines, offer growth potential.
  • Resilient business model less affected by commodity price volatility.
  • Energy Transition Investments: TC Energy’s shift toward renewable energy could secure long-term relevance.
  • LNG Growth: Rising global demand for LNG could benefit TC Energy’s natural gas pipelines.
  • Pipeline Expansions: Monitor progress on new pipeline projects, as these are critical for growth.
  • Regulatory Environment: Policy changes around pipeline approvals could impact future projects.
  • Regulatory Challenges: Securing approvals for new pipelines remains a significant hurdle.
  • Environmental Activism: Growing opposition to pipelines could lead to delays or cancellations.
  • Interest Rate Sensitivity: Higher interest rates increase borrowing costs and impact profitability.
  • Commodity Price Exposure: While largely insulated, some revenue is linked to energy market dynamics.

North America’s largest pipeline operator

Enbridge (TSE:ENB)

Enbridge operates the largest pipeline network in North America, transporting crude oil, natural gas, and other liquids. In addition to its core pipeline business, the company has been expanding into renewable energy projects like offshore wind and solar farms. Enbridge’s stable cash flow, driven by regulated and contracted assets, supports its reputation as a dividend powerhouse.

P/E: 20.6

5 Yr Revenue Growth: -2.0%

5 Yr Earnings Growth: 13.3%

5 Yr Dividend Growth: 4.9%

Yield: 6.0%

  • Reliable dividend payer with a yield of ~6.8%.
  • Industry leader in pipeline infrastructure, critical for North American energy.
  • Growing investments in renewable energy ensure long-term sustainability.
  • Large, diversified asset base provides stability and scalability.
  • Resilient earnings due to long-term contracts and regulated revenues.
  • Strong ESG initiatives, balancing traditional energy and renewables.
  • Energy Transition: Enbridge’s investments in renewable energy projects like offshore wind position it for the future.
  • Pipeline Utilization: Strong demand for its infrastructure ensures stable cash flows.
  • Dividend Stability: Investors should watch for continued dividend increases.
  • Regulatory Landscape: Pipeline approvals and environmental policies remain critical factors.
  • Regulatory Pressures: Challenges in securing approvals for new pipelines could limit growth.
  • Interest Rate Environment: Rising rates may increase financing costs.
  • Environmental Activism: Opposition to pipeline infrastructure could impact operations.
  • Commodity Dependence: While insulated, pipeline usage is ultimately tied to oil and gas demand.

Canada’s largest natural gas producer

Tourmaline Oil (TSE:TOU)

Tourmaline Oil is a leading Canadian natural gas producer with operations in Alberta and British Columbia. The company focuses on low-cost, high-margin production and has positioned itself as a key player in both domestic and international LNG markets. Tourmaline is also a significant dividend payer, returning substantial cash to shareholders through special dividends.

P/E: 15.2

5 Yr Revenue Growth: 23.6%

5 Yr Earnings Growth: 27.7%

5 Yr Dividend Growth: 23.2%

Yield: 2.0%

  • Largest natural gas producer in Canada with low-cost operations.
  • Strong exposure to growing LNG export markets.
  • Attractive dividend payouts, including special dividends tied to cash flow.
  • Solid balance sheet and disciplined capital allocation.
  • Industry leader in reducing methane emissions, appealing to ESG-focused investors.
  • Positioned to benefit from rising natural gas demand domestically and globally.
  • LNG Export Growth: Tourmaline’s access to global LNG markets is a key growth driver.
  • Special Dividends: Investors should monitor cash flow performance for potential special dividend payouts.
  • Methane Reduction: Tourmaline’s leadership in emissions reductions could enhance its ESG profile.
  • Natural Gas Demand: Rising global reliance on natural gas for power generation is a long-term tailwind.
  • Commodity Price Volatility: Tourmaline’s earnings are sensitive to natural gas price fluctuations.
  • Pipeline Capacity: Limited pipeline infrastructure in Western Canada could constrain growth.
  • Regulatory Uncertainty: Changing rules around emissions and drilling could increase costs.
  • Global LNG Competition: Tourmaline faces competition from international LNG suppliers.

So, are Canadian oil companies and Canadian pipeline stocks still worth it today?

In short, yes, they are. There are numerous options for Canadian energy companies with a strong focus on oil.

Although we are expected to hit peak demand by 2030, according to some experts, as the transition to renewable energy companies continues, we will still need to produce the commodity for the foreseeable future.

With this, we will need oil companies to produce the commodity and pipelines to ship it.

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These oil stocks are still trading at discounts because of the current volatility in oil. They’re also still facing significant volatility themselves as producers. If you’re new to buying stocks, volatility is simply the overall velocity of the movements in a stock’s price.

Investing in the oil and gas sector and volatility go hand in hand, so just make sure that investing in the industry fits within your risk tolerance.

Bonus: An alternative option for those looking for Canadian energy stocks in XEG.TO

Yes, this post is supposed to be a list of the best Canadian oil and gas stocks. However, there is no doubt that it may be wise to gain broad exposure to the energy industry rather than buying individual producers and hoping they’re successful.

So how do you get this exposure on a producer level? Buying the iShares S&P/TSX Capped Energy Index ETF (TSE:XEG) is one of the most popular ways. This ETF tracks some of the largest oil producers in the country, including integrated oil company Suncor Energy, Cenovus, Tourmaline, Imperial Oil, Canadian Natural Resources and more.

The ETF has $1.9B in assets under management and has fees of 0.61%. You’ll have no problem trading shares, as daily volume often exceeds 2.3 million shares.

You won’t get any pipeline exposure out of this ETF, however, so the list above is still a useful resource to identify strong midstream companies.

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