In the middle of the Euro crisis, when the ECB is holding emergency meetings and Obama decides to hold a press conference at the NASDAQ, it’s a good time to look to global fundamentals for reorienting our portfolios. This means commodities - if there is any growth globally, commodities will soak it up first. And so we see that West Texas Intermediate is sitting at only $82.97/barrell right now – meaning that oil is relatively cheap. It’s a good time to buy oil.
Canadian oil stocks have also pulled off recently, but if you want to invest in a politically stable source of oil, an area with a huge amount of reserves (even without getting into unconventional sources such as the oil sands), then you should really look to Canada. Canada’s oil stocks benefit from the exported inflation and money printing in the US, which raises oil prices and stimulates more production.
5 Smart Canadian Energy Stocks
Suncor (TSX: SU) - Suncor is a blue chip oil stock with exposure to both conventional and unconventional (read: oil sands) sources. Steady growth, a secure and growing dividend and good balance sheets keep Suncor a no-brainer for most analysts. The question is just how often can it go on sale. Right now it’s sitting around $29.08, comfortably within its 52-week range.
Surge Energy (TSX: SGY) – Surge is a relative newcomer but has shown excellent growth in the past three years and has a great growth profile going ahead over 3-5 years. A small to intermediate oil producer, Surge Energy has over 400 drilling locations, an excellent balance sheet and is exceeding all of its targets right now.
Imperial Oil (TSX: IMO) – Imperial is possibly the bluest blue chip of all Canadian oil stocks for sure. The dividend has always been a bit thin, but that’s because of the huge amount of reinvestment in their own operations they are always committing to. Investing in Imperial (for everyone outside of Canada) is like choosing Chevron or Exxon. This is a stable company with impeccable balance sheets and cash reserves.
Essential Energy (TSX: ESN) – Here’s another out-of-the-mainstream play that you should know about. Essential is now an oil-oriented service company (servicing wells that have already been drilled). It dominates its field in Canada and has recently instated a nice dividend. It also has small exposure to natural gas and just opened up a small division in Colombia. The company itself engages in no fracking or drilling.
Talisman Energy (TSX: TLM) – Talisman is good for those looking for leverage to natural gas as it is able to explore more in the shale areas in the United States. Long a favorite Canadian energy stock, Talisman
Don’t wait too long, though – oil stocks are on a multi-day rise at the moment, extending gains as the US reported its first inventories declines in over 11 weeks. It is also the beginning of driving season, when North Americans begin gassing up more frequently for summer road trips and vacations.-