Investor interest in traditional oil and gas stocks, as well as Canada's mining and metals sector, has seen a significant upturn, according to recent data from the Toronto Stock Exchange. The TSX 30 list for 2023, released on Tuesday, ranks the top-performing stocks over a three-year period based on dividend-adjusted share price performance. This year's ranking is heavily dominated by the oil and gas sector, which makes up 50% of the list.
Calgary-based Paramount Resources Ltd . (TSX:POU)claimed the top spot with a share price increase of 1,913% over three years. NuVista Energy Ltd . (TSX:NVA), another Calgary-based oil and gas exploration and production company, came in second with a share price appreciation of 1,279%.
The oil and gas sector in Canada experienced a resurgence in 2022 following Russia's invasion of Ukraine. This geopolitical event caused commodity prices to spike and refocused investor attention on the sector. "We believe (Canadian oil and gas companies) are seen as a source of energy security, with the ongoing energy supply issues that we're seeing globally," said Loui Anastasopoulos, CEO of the Toronto Stock Exchange.
However, the TSX 30 list also indicated an increasing interest in alternative, non-fossil fuel forms of energy. Seven of the 30 companies listed are from the mining sector. This shift is attributed to a surge of investor interest in critical minerals and metals expected to play a key role in the energy transition. Metals such as copper, lithium, and zinc are witnessing increased demand due to their use in batteries, electric cars, and renewable energy infrastructure.
Montreal-based Aya Gold & Silver Inc (TSX:AYA) planning to quadruple its silver production from its Moroccan mining assets to meet growing global demand for solar panels, placed 14th on this year's TSX 30 list due to its 498% three-year share price appreciation. "Every metal that is related to this energy transition will do very well because the fundamental demand is there," said Benoit La Salle, Aya's CEO.
Five out of the seven mining companies on the list are included in the S&P/TSX Battery Metals Index and the newly launched S&P/TSX Energy Transition Materials Index. Anastasopoulos stated that he expects the natural resource industry to continue being a powerhouse for the Canadian economy, even as the sector adapts to reduce carbon emissions in response to climate change.
The companies featured on the 2023 top 30 list averaged 553% share price appreciation over the last three years, accounting for over $120 billion of value creation.
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