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Canada’s energy sector has been on fire in 2021. Oil and gas prices have soared on the back of lower-than-expected supply and improved demand. The spike in demand has been powered by the ongoing global economic rebound. Investors may be eager to take profits, but energy stocks still have room to grow in this environment. Today, I want to look at three energy equities that could provide big returns over the next year. Let’s dive in.
This top energy stock still offers nice value
Suncor Energy (TSX:SU)(NYSE:SU) is one of the largest energy stocks by market cap on the TSX. The company specializes in the production of synthetic crude from oil sands. Shares of this energy stock have increased 50% in 2021 as of close on November 16. The stock is up 61% year over year. However, it has still failed to recover to its pre-pandemic levels. That can change in 2022.
The company released its third-quarter 2021 results on October 27. I’d suggested that investors should scoop up this energy stock after its Q2 2021 earnings release. In Q3 2021, Suncor posted funds from operations (FFO) of $2.64 billion, or $1.79 per common share — up from $1.16 billion, or $0.76 per common share, in the prior year. Moreover, net earnings rose to $877 million, or $0.59 per common share, over a net loss of $12 million, or $0.01 per common share, in Q3 2020.
This energy stock is still trading in favourable value territory in comparison to its industry peers. It last doubled its quarterly dividend to pre-pandemic levels at $0.42 per share. That represents a strong 5.2% yield.
Soaring oil and gas prices are powering this super stock
Imperial Oil (TSX:IMO)(NYSE:IMO) is the second-largest integrated oil company in Canada. Shares of this energy stock have surged 81% in the year-to-date period. The stock is up 98% year over year. That means Imperial Oil has nearly doubled its value on the back of these bullish conditions.
I’d suggested that investors scoop up this energy stock in late October. In the third quarter of 2021, Imperial Oil saw net income soar to $908 million compared to a paltry $3 million in Q3 2020. It hit $1.66 billion for the first nine months of 2021 compared to a net loss of $711 million in the prior year-to-date period.
Shares of this energy stock are still trading in attractive value territory over its competitors. It offers a quarterly dividend of $0.27 per share. That represents a 2.4% yield.
Here’s another energy stock I’d snag in this environment
Cenovus Energy (TSX:CVE)(NYSE:CVE) is the third and final super energy stock I’d recommend snatching up right now. This energy stock has shot up 96% in 2021 as of close on November 16. Its shares have soared 153% in the year-over-year period.
In Q3 2021, Cenovus saw cash from operating activities increase 192% year over year to $2.13 billion. Meanwhile, adjusted funds flow jumped 475% to $2.34 billion. Total upstream production nearly doubled to 804,800 barrels of oil per day (BOE/d).
This energy stock is also trading in solid value territory, despite its soaring value over the past year. Cenovus announced a quarterly dividend increase to $0.035 per share. This represents a modest 0.9% yield.