Better Energy Stock: Canadian Natural Resources vs. Brookfield Renewable Partners

The choice between investing in traditional and renewable energy stocks often feels like a clash of eras for Canadian investors. On one side, you have the reliable oil sands heavyweights that have powered growth and income-oriented portfolios for decades. On the other side, the green energy giants are riding a new wave of global energy transition that promises explosive capital gains.

The debate between “old world” energy and the “new world” of renewables stock investments often boils down to a heavyweight match between oil king Canadian Natural Resources (TSX:CNQ) and green energy giant Brookfield Renewable Partners (TSX:BEP.UN).

If you’re looking for the better energy stock to buy right now, the first four months of 2026 have already dropped some hints. CNQ stock has delivered a 31% year-to-date total return, narrowly beating Brookfield Renewable stock’s respectable 27.5%. But as every seasoned investor knows, past performance is just a rearview mirror image.

Here is how these two titans stack up for the rest of 2026.

Canadian Natural Resources: An energy stock to buy for growing cash flow

Canadian Natural Resources has long been the gold standard for operational excellence in the oil-sands patch. CNQ stock is literally a cash flow machine, thanks to its vast portfolio of long-life and low-decline assets.

These assets allow the firm to maintain industry-leading breakeven points in the low to mid US$40 per barrel range. When West Texas Intermediate crude oil is hovering above the US$90 mark, as it has been lately amid tensions in the Middle East and the Strait of Hormuz, profit and cash flow margins for low-cost oil producers like Canadian Natural Resources are simply staggering.

Investment bank analysts, who initially expected oil prices to average between US$55 and US$77 for 2026, have since updated their price forecasts to include Morgan Stanley’s US$110 crude oil outlook for this quarter. Higher oil accelerates CNQ’s ability to extinguish debt and quickly return to a generous capital budgeting policy that returns 100% of free cash flow to investors through dividends and share repurchases.

CNQ’s liquidity and financial strength have translated into one of the most impressive dividend records in Canada. The dividend-growth stock announced its 26th consecutive year of dividend increases. The ever-growing CNQ quarterly dividend yields approximately 4.1% annually, making the energy stock a favourite dividend growth stock for income seekers who believe oil demand will remain resilient for years to come.

Brookfield Renewable Partners stock

Brookfield Renewable Partners stock is arguably the architect of the new energy world. The company has moved beyond being just a green utility and is now a critical infrastructure partner for the world’s largest tech companies as they embark on a massive, multi-billion-dollar artificial intelligence expansion drive in 2026.

Power-intensive AI data centres require 24/7, all-year-round firm power to run their data centres, and Brookfield’s global hydroelectric and nuclear fleet is perfectly positioned to provide it.

Through its equity investment stake in Westinghouse Electric (49% co-owned by Cameco), Brookfield Renewable Partners may earn growing dividends from Westinghouse if the US$80 billion deal with the U.S. government for small nuclear power plants executes as expected. This deal could potentially revalue Westinghouse at US$30 billion in an initial public offering. Brookfield and Cameco acquired Westinghouse for a combined US$8.2 billion in 2023, including working capital injections.

Other major green energy deals include a $10 billion framework deal with Microsoft for 10.5 gigawatts of new renewable energy capacity before 2030. This deal came live this year and was roughly eight times larger than any previous corporate power-purchase agreement signed before 2025.

With Brookfield Renewable’s development pipeline exceeding 200 gigawatts and a management team targeting 10% annual growth in funds from operations per unit, Brookfield Renewable stock offers a growth trajectory that most traditional utilities can’t match right now.

Dividend investors aren’t left behind. BEP.UN stock also pays a more generous 4.7% annual dividend yield, making it an attractive “green” income play.

So, which is the better energy stock to buy right now?

If you had to pick just one of the energy stocks for your retirement fund today, the decision would likely hinge on whether you value immediate cash flow (and therefore lean towards CNQ stock) or prefer long-term structural growth (which draws you towards BEP.UN stock). Both investment candidates make sense.

The post Better Energy Stock: Canadian Natural Resources vs. Brookfield Renewable Partners appeared first on The Motley Fool Canada.

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More reading

• Suncor, Enbridge, or Canadian Natural — Which Oil Stock Fits Your Portfolio Best?
• The 3 TSX Stocks I’d Be Most Eager to Buy at This Very Moment
• TFSA Contribution Season Has Arrived – Here Are 3 Canadian Energy Stocks to Consider
• 3 Dividend Stocks That Belong in Almost Every Investor’s Portfolio
• How a $10,000 TFSA Investment Could Be Set Up to Generate Steady Cash Flow 

Fool contributor Brian Paradza has positions in Cameco. The Motley Fool recommends Brookfield Renewable Partners, Cameco, Canadian Natural Resources, and Microsoft. The Motley Fool has a disclosure policy.