Should you keep an eye on these TSX energy stocks this year?

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• As per market trends, rising inflation is considered a driving factor behind increasing commodity prices.
• Enbridge Inc (TSX:ENB). announced a 3.2 per cent increase in its annual dividend from March 1, 2023.
• Cenovus Energy (TSX:CVE) generated over C$ 4 billion in cash from its operating activities in Q3’22.

Companies that produce, manage, and sell energy products, such as natural gas, crude oil, and other fossil fuels, as well as renewable wind, solar, and hydro energy sources, are included in the Canadian energy sector.

Amid the current volatile condition of the Canadian stock market caused by inflationary and recessionary pressures, the energy industry tends to soar due to increasing commodity prices. However, one should be ready for surprises in the stock market due to its volatile nature and nothing is guaranteed.

The S&P/TSX Capped Energy Index has gained 2.09 per cent year-to-date (YTD), and in light of this, let’s see how these two Toronto Stock Exchange-listed (TSX) energy companies are doing:

Enbridge Inc. (TSX: ENB) Headquartered in Calgary, Alberta, Enbridge Inc. is a Canadian energy company that provides daily-use and renewable energy to millions of people across the US and Canada. Enbridge also has offshore wind projects operating in Europe. The Canadian mainline system, local oil sands, and natural gas pipelines make up Enbridge’s wide pipeline network.

Earlier this month, the company said to have received approval from the TSX for its new normal course issuer bid (NCIB) to buy up to 27,938,163 of its existing common shares for cancellation for a total of C$ 1.5 billion.

Enbridge expects to return capital to shareholders through this renewal, using a supplemented dividend program that will offer an additional capital allocation tool.

The company also reiterated its full-year guidance for 2022, which calls for adjusted EBITDA to be in the upper half of the C$ 15.0-15.6 billion range. Additionally, Enbridge announced an increase in the annualized common share dividend, rising from C$ 3.44 to C$ 3.55 per share, effective March 1, 2023.

Cenovus Energy Inc. (TSX: CNV) An integrated oil and natural gas firm, Cenovus Energy Inc. is engaged in developing its oil sands assets alongside oil and gas production units in Canada and the Asia Pacific. The company also conducts refining activities in the United States.

Cenovus Energy has delivered a cash dividend of C$ 0.105 per share on a quarterly basis, with an annual dividend yield of 1.679 per cent.

The Canadian energy giant recently informed the market of its 2023 budget, according to which Cenovus Energy plans to spend C$ 4-4.5 billion. From the total spending, C$ 2.8 billion is allotted for maintaining safe, reliable, and efficient production, and C$ 1.2-1.7 billion is set aside for the optimization and growth of the company.

Meanwhile, Cenovus Energy mentioned generating more than C$ 4 billion in cash from operating activities, C$ 3 billion in adjusted cash flow, and nearly C $2.1 billion in free cash flow in the third quarter of 2022.

Cenovus Energy’s financials are in the table below:

© 2023 Krish Capital Pty. Ltd.

Bottom Line When the stock market is highly volatile, one should be cautious before investing. Therefore, as an investor, you should always be very analytical when placing bets on any stock, be it energy or other sectors.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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