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Energy stocks were among the best assets to invest in the current market environment, even before the war with Ukraine. It’s no surprise then that energy stocks are so popular. EnbridgeStock (TSX:ENB), (NYSE:ENB), and several other Canadian energy companies have been the top performers this year.
However, energy stocks have seen a significant increase in the tailwinds they have been experiencing due to the conflict in Ukraine. It is crucial that investors have exposure and control over high-quality stocks of energy stocks.
So, with Enbridge being the $100 billion energy giant that it is, you may be wondering if it’s the best energy stock to buy now.
Is Enbridge stock a good investment in this environment?
There’s no question Enbridge is an excellent stock and one of the best companies you can buy for your portfolio. What’s so attractive about Enbridge is that even if the energy industry weren’t seeing significant tailwinds like it is today, it would still be an excellent investment and a stock you can count on.
Whether it’s the very best energy stock to buy for your portfolio will depend on several factors. Enbridge is a better choice for investors who are looking for lower-risk investments as well as safer income. The company’s operations are extremely defensive, and it’s a Dividend Aristocrat that pays a meaningful dividend.
Enbridge is still a great stock to have in your portfolio, as it generates tons of income. However, if you’re more of a growth investor or younger and willing to take on more risk, you may want to consider a stock with more exposure to energy production. These stocks are more volatile, and offer more growth potential in the current market.
What’s the best energy stock to buy now?
High-quality investments are made by buying energy stocks that not only perform well today, but can also be companies we can hold for many years. Right now, energy stocks have a tonne of momentum, but there’s no telling what’s going to happen a few months from now.
So, it’s crucial to find businesses that are companies you have confidence in. That’s why two of the best investments in the energy sector to consider are Peyto Exploration & Development(TSX:PEY). Royalties for Free (TSX:FRU).
Both stocks offer attractive growth and substantial income. With that being said, Freehold is a stock that’s particularly attractive for dividend investors.
The company owns land on which other energy stocks can produce oil and natural gas. Freehold is paid a royalty. So, it offers exposure to increasing commodity prices and production, but it’s a lower-risk way of doing so.
And because the company has hardly any debt and pays most of its income back to investors through its 6.4% dividend, it’s a stock with much less risk than its peers. So, if you’re looking to find the best energy stock to buy, Enbridge is certainly one, but Freehold is another top contender.
However, Peyto is another energy stock you can have confidence owning long term, as it’s one of the highest-quality natural gas producers. Natural gas is a fossil fuel that has a tonne of long-term potential itself, and because Peyto is a well-managed, low-cost producer, it’s certainly a top energy stock to buy now.
Plus, on top of the short- and long-term growth potential it offers, Peyto’s dividend currently Yields 4.2%. Enbridge stock can be a great investment. But, there are other high-quality stocks that you can purchase in this market.
