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3 High-Yield Energy Stocks for Dividend Investors

Andrew Button
Growth from coins
Growth from coins

TSX Energy stocks are finally coming into their own. After years of underperformance, the TSX Energy sub-index rose 16% in Q1 2019, beating the S&P/TSX Composite Index by about 0.5%.

Rising 16% in three months is a solid gain for any index. But for TSX energy stocks, it’s practically a miracle. Ever since the 2014 oil price collapse, TSX energy stocks have been losing market cap at a heart-stopping pace.

Some, like Baytex Energy, are down as much as 95%. The underperformance of the TSX energy sector was severe enough that it noticeably dragged down the TSX as a whole over the past five years.

Now, however, things are starting to look up. TSX energy stocks are still vulnerable to oil price swings, but with oil climbing upward and Chinese demand rising, there’s no telling where oil & gas companies will go.

If you think energy stocks are set for a rise, the TSX is a great place to be. And if you want some income with your energy plays, here are three dividend-paying energy stocks that could pay you for years into the future.

Enbridge Inc (TSX:ENB)(NYSE:ENB)

Enbridge is a pipeline company that moves about two-thirds of Canada’s crude oil exports. The company owns and operates pipelines across Canada and the U.S.

Recently, Enbridge has been pursuing a pipeline expansion in Michigan that would increase the company’s ability to transport crude to crucial U.S. markets. The project has been green lit, giving Enbridge the go-ahead to build infrastructure that will boost its revenue.

Owing to its strong earnings, Enbridge is able to pay a dividend that yields a whopping 5.95% as of this writing.

TC Energy (TSX:TRP)

TC Energy is the second pipeline company on this list, the operator of the infamous Keystone XL pipeline. TC Energy has faced issues in recent years over project delays brought on by U.S. regulators. Now, however, political will down South is shifting in favour of Keystone, which was controversial because of environmental and aboriginal land claim issues.

Regardless of whether or not the Keystone expansion goes ahead, TC Energy pays a mighty fine dividend that yields 4.4%.

Suncor Energy (TSX:SU)(NYSE:SU)

Last but certainly not least, we have Suncor Energy. Suncor has been one of the best performing TSX energy stocks over the past five years, rising 8% while the energy sector as a whole lost value.

An 8% gain over five years might not sound like much, but the stock went on a major rally from mid 2016 to 2018 that saw it rise over 30%. Owing to its comparably steady income stream, Suncor is able to pay a dividend, which yields 3.26% as of this writing.

That’s not the highest yield among the stocks on this list, but it may be one of the safer payouts, as Suncor isn’t facing the regulatory hurdles of TC Energy and Enbridge.

More reading

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool owns shares of Enbridge. Enbridge is a recommendation of Stock Advisor Canada.

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