1 TSX Energy Stock I’d Buy Even If Oil Pulls Back

Oil prices dropping or rising might make investors believe that every gas stock will be affected the same way. But that’s just simply not the case. Some energy stocks don’t depend heavily on crude prices, having a wider setup, with natural gas and liquids, as well as low operating costs, hedging, strong balance sheets, and dividends.

That’s why today we’re looking at one energy stock built to keep generating cash even when commodity prices wobble.

TOU

Tourmaline Oil (TSX:TOU) is a Calgary-based energy producer focused mainly on natural gas, with operations in the Alberta Deep Basin and the Northeast British Columbia Montney. If oil pulls back, investors may still want energy exposure through gas, liquids, and LNG-linked demand rather than only crude. TOU stock offers that, averaging 666,089 barrels of oil equivalent per day (boe/d) in Q1 2026, a huge production base for a Canadian energy stock.

TOU stock spent the last year strengthening its scale and future growth profile. For instance, TOU stock made the Crew Energy acquisition, which expanded its Montney position and was expected to add more than $200 million to projected 2025 free cash flow. Furthermore, the company’s Aitken expansion remains on track for Q4 2026, while the Groundbirch deep cut plant is expected in Q4 2027.

Into earnings

All this strength showed up in earnings, with the last quarter coming in hot even amidst weak local gas prices. During Q1 2026, cash flow came in at $862.2 million, or $2.21 per diluted share. TOU stock generated $202 million in free cash flow and posted Q1 net earnings of $657.6 million.

Furthermore, TOU stock ended Q1 2026 with net debt of $1.5 billion, below its long-term debt target of $1.75 billion. Net debt equalled about 0.4 times cash flow, which gives the company room to keep investing and returning cash to shareholders. Yet all this and the company looks reasonable, trading at 36.7 times earnings and offering a 3% dividend yield. Not dirt cheap, but not out of this world either.

Looking ahead

There’s a lot to look forward to for TOU stock. The company still expects full-year 2026 production of 620,000 to 640,000 boe/d. Furthermore, management now expects about $900 million in free cash flow in both 2026 and 2027, helped by stronger condensate, propane, and international LNG pricing.

Now it’s not perfect, as Western Canadian natural gas prices could pressure results, and management has already flagged that it could defer another $200 million of 2026 drilling and completion spending if weak prices persist. Yet given its strength thus far, the company seems to have the ability to make it through any bumps that might come its way.

Bottom line

So yes, oil can affect energy stocks, but not necessarily all of them. TOU stock is one of those stocks, with huge production, major gas assets, LNG-linked upside, liquids exposure, a clean balance sheet, and a dividend history that keeps improving. Plus a solid dividend to bring in cash even with a $7,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTTOU$66.45105$2.00$210.00Quarterly$6,977.25

All in all, for investors who want one TSX energy name to buy before oil cools, TOU stock looks like one of the strongest candidates on the board.

The post 1 TSX Energy Stock I’d Buy Even If Oil Pulls Back appeared first on The Motley Fool Canada.

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More reading

• 3 TSX Stocks to Buy Before the Next Oil Spike Hits
• A Standout TFSA Stock With a 6 % Monthly Payout Worth Knowing About
• Oil Above $110 and Rates on Hold: 3 Canadian Energy Stocks Built for Both
• 1 Canadian Dividend Stock Off 15% to Buy and Hold Forever
• 4 Canadian Dividend Stocks That Could Help You Build $500 in Monthly Income

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Tourmaline Oil. The Motley Fool has a disclosure policy.