2 Powerful Stocks I’d Feel Confident Holding for the Next 5 Years

The Bank of Canada (BoC) started increasing key interest rates to respond to red-hot inflation and cool it down to more reasonable levels. After the disruption it caused, the measure gradually achieved its goal. Now, BoC is decreasing key interest rates and keeping them at lower levels. The goal was to spur economic growth and provide much-needed relief to borrowers, whether they’re businesses or consumers.

As interest rates go lower, some TSX stocks are better-positioned to benefit from the policy shift than others. The Canadian energy sector might be set to benefit the most due to this change in policy. Coupled with the surging demand for Canadian energy products amid deteriorating supply from the Middle East, it could be the perfect recipe for success.

Companies in the energy industry have been efficient in capitalizing on higher commodity prices and making strategic acquisitions. Against this backdrop, here are two Canadian energy stocks I would recommend having on your radar if not already in your self-directed portfolio.

Enbridge

Enbridge Inc. (TSX:ENB) is a staple holding for many Canadian investors. The Calgary-based $163.2 billion market-cap TSX energy infrastructure company is a giant in the sector. It boasts an extensive and diversified portfolio of energy infrastructure assets, including a pipeline network transporting hydrocarbons produced and consumed in North America. Enbridge also has a growing gas transmission, storage, and distribution segment, alongside a growing renewable power generation segment.

Its growing presence in the utility sector shores up the company’s revenue generation. The company’s management has been proficient with its capital allocation, driving success over the years. The company’s long-term growth initiatives make it an increasingly attractive investment to consider. As of this writing, ENB stock trades for $74.78 per share and boasts a 5.2% dividend yield that is too good to ignore.

Baytex Energy

Baytex Energy Corp. (TSX:BTE) is another energy industry player based in Calgary, but it is a much smaller company than Enbridge by market cap. The $4.7 billion market-cap company has seen its stock rise up quickly in recent times. As of this writing, Baytex Energy stock trades for $6.14 per share, up by a massive 221.5% from its 52-week lows.

BTE’s recent rise in share prices can be attributed to its decision to divest from the US Eagle Ford assets. That deal alone brought in $3 billion for the company, giving it room to focus more on its domestic operations. The company experienced a net loss in 2025, mostly due to one-time items related to the divestiture, but its operating performance stayed solid.

With plans for share buybacks and the maintaining of its meager but reasonable dividends, it seems too good a deal to ignore Baytex stock right now.

Foolish takeaway

Even with global trends suggesting stronger energy prices and demand for Canadian energy products, stocks in this industry are not immune to market volatility. If anything, the stocks are more sensitive to the changes, at least in the short term. However, the near-term picture looks great for energy sector investors. I think that ENB stock and BTE stock can be good investments to leverage the tailwinds for Canadian energy stocks.

The post 2 Powerful Stocks I’d Feel Confident Holding for the Next 5 Years appeared first on The Motley Fool Canada.

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More reading

• TFSA: Invest $14,000 in This TSX Stock and Create $725.60 in Annual Passive Income
• 3 Stocks I’d Buy Today and Hold Comfortably All the Way to 2031
• My Top Canadian Dividend Stocks You’ll Want to Own Forever
• How to Build a $50,000 TFSA That Throws Off Nearly Constant Income
• A Year After the Rate Pivot – Here Are 2 Canadian Stocks I’d Still Buy Now

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.