Dividend Investors: Premier Canadian Energy Stocks to Buy in December

There’s no question about it – dividend stocks are invaluable investments in a well-diversified portfolio. Whether you reinvest or spend their consistent, and hopefully growing dividend income, they certainly have a positive wealth impact on investors.

Canadian energy stocks have long provided Canadian dividend investors with growing dividend income. In fact, this sector is one of Canada’s engines of growth, and one that can be extremely lucrative. While oil prices have weakened recently, the medium-term outlook remains positive. As for natural gas prices, they have already started to strengthen, and I expect continued strength in the new year.

Without further ado, here are three Canadian energy stocks to consider for your dividend income needs.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ), one of Canada’s premier energy companies, has shown itself to be quite the cash cow. These inflows have been driven by the company’s diversified, long-life asset base (33 years), with exposure to heavy oil, light crude oil, natural gas, and oil sands. These assets require minimal capital investment, and this has driven exceptionally strong cash flow generation.

As for uses of this cash, management’s stated objective is to return much of this wealth to its shareholders. In the three and nine months ended September 2025, the company generated $3.9 billion and $11.7 billion, respectively, in adjusted funds flow. This has translated into strong dividend growth out of CNQ. In fact, the company has a track record of 25 consecutive years of dividend growth, with a compound annual growth rate (CAGR) of 21% over that time period.

Canadian Natural is currently yielding a very generous 5%.

Suncor Energy

Another one of Canada’s top energy stocks, Suncor Energy Inc. (TSX:SU), has proven its worth as a top dividend stock. Like Canadian Natural, Suncor has committed to returning a big chunk of its cash flow to investors.

Suncor is an integrated energy company, with assets across the oil and gas value chain – exploration and production, and refining and marketing. This diversification supports stable and growing cash flows that are somewhat shielded from oil and gas price fluctuations.

In the third quarter, Suncor’s adjusted funds from operations came in at $3.8 billion or $3.16 per share. This was the second-highest third quarter in history. This result was achieved despite lower WTI oil prices, which highlights the company’s value. Due to these record results, Suncor instituted a 5% dividend hike in the quarter, to $2.40 per share. Suncor is currently yielding 3.9%.

Tourmaline Oil

Finally, Tourmaline Oil Corp. (TSX:TOU) is a Canadian natural-gas weighted energy stock. It has also committed to return a large portion of its excess cash flows to shareholders. This has resulted in strong returns for its shareholders and rapidly growing dividend payments.

Natural gas prices have been rallying as of late. U.S. natural gas prices have rallied 68% since September lows. And Canadian natural gas prices have rallied from pennies in September to more than $2.25 currently. This strong pricing action is being driven by the opening of LNG Canada, which is increasingly boosting natural gas demand. It’s also being driven by the electrification of the energy grid, with demand from utilities and data centres rising rapidly.

Tourmaline reported lower cash flow in its latest quarter, down 3% to $719.6 million. This was due to weak natural gas prices in Canada. In fact, prices were at their lowest levels in over 30 years in the third quarter. Given this, Tourmaline’s third-quarter cash flow is an exceptionally strong result.

Tourmaline is currently yielding a very respectable 3%, with the likelihood of many more special dividend payments to come.

The post Dividend Investors: Premier Canadian Energy Stocks to Buy in December appeared first on The Motley Fool Canada.

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More reading

• TFSA Gold: 2 Dividend Stocks to Lock in Now for Decades of Passive Income
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• TFSA Income: 2 Premier Canadian Dividend Stocks to Buy Right Now With $10,000
• Invest $20,000 in 2 TSX Stocks for $839 In Passive Income
• Transform Your TFSA Into a Cash-Creating Machine With $15,000

Fool contributor Karen Thomas has a position in Tourmaline Oil. The Motley Fool recommends Canadian Natural Resources and Tourmaline Oil. The Motley Fool has a disclosure policy.