2 Canadian Energy Stocks That Still Look Cheap Today

It has been a wild year for Canadian energy stocks. Crude oil prices started 2026 at $56 per barrel. Oil shot up to as high as $112 and has since pulled back to $99 today. The conflict in the Middle East, and particularly the halting of shipments through the Strait of Hormuz, have drastically restricted global crude supplies.

Canadian energy stocks could still run from here

Many countries have already exhausted their strategic energy reserves. Even if the conflict resolves today, crude prices are likely to remain elevated for some time.

This is especially good for Canadian energy stocks. Since the pandemic, they have spent the past few years consolidating assets, streamlining operations, reducing their cost structure, and lowering debt. Most companies are sitting with the lowest debt they have had in years. As a result, they are true cash flow machines. That is made even more true when oil prices are trading over $80 per barrel.

While the S&P/TSX Capped Energy Index is up 46%, there are still stocks to be found that look reasonably cheap today.

Strathcona Resources: A mid-cap energy stock

Even after rising 72% this year, Strathcona Resources (TSX:SCR) looks interesting. Strathcona is trading with a 12% free cash flow yield and 8 times free cash flow.

Since 2017, Strathcona has been consolidating heavy oil plays across Western Canada. Today, it produces around 125,000 barrels per day. With a market cap of $10.5 billion, it is a solid energy mid-cap stock.

Strathcona is aiming to grow production to 200,000 barrels per day in the coming five years. It has 29 years of delineated reserves on hand that it can unlock.

The company is breakeven at $41 per barrel and can fund its growth plans and dividend at $58 per barrel. Any excess beyond that can be allocated between mergers and acquisitions, debt repayment, and shareholder returns (buybacks or special dividends).

Strathcona trades at the low-end of the valuation range for Canadian heavy oil peers. Yet, it might have the highest production growth potential of the group. Strathcona pays a 2.5% dividend yield. This stock gives you a nice mix of income and then capital upside as it executes on its growth strategy.

Cenovus Energy: A top integrated energy producer

Cenovus Energy (TSX:CVE) stock is up 79% this year. Keep in mind that its stock was trending upwards even before the Middle East crisis hit. This suggests that more and more institutional investors have been returning to the energy space. Currently, Cenovus trades with a 12% free cash flow yield and for 8.4 times free cash flow.

This is one of the best integrated energy platforms you can find today. It produces 972,000 barrels of oil per day and refines around 460,000 barrels.

The company struggled with its refinery assets for several years. However, it has cleaned up those operations. That business seems to be chugging away with near capacity utilization, right when gasoline prices are historically elevated.

Cenovus also massively bolstered its oil sands and thermal production when it added MEG Energy’s assets into its portfolio. Many are suggesting that it snagged an absolute bargain in that transaction.

This energy stock yields 2.1% today. It has raised its dividend for the past six consecutive years. As it pays down debt from the MEG transaction, shareholders will see increasing returns (dividends and buybacks) back to them.

The post 2 Canadian Energy Stocks That Still Look Cheap Today appeared first on The Motley Fool Canada.

Should you invest $1,000 in Cenovus Energy right now?

Before you buy stock in Cenovus Energy, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Cenovus Energy wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have over $18,000!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 94%* – a market-crushing outperformance compared to 85%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of April 20th, 2026

More reading

• TFSA Contribution Season Has Arrived: Here Are 3 Canadian Energy Stocks to Consider
• 1 Canadian Energy Stock Poised for Big Growth in 2026
• 3 Canadian Oil Stocks That Could Thrive No Matter What OPEC Does
• Where I’d Put $10,000 in Canadian Stocks Right Now
• 1 Canadian Energy Stocks Poised for Big Growth in 2026

Fool contributor Robin Brown has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.