Are Oil Sands Stocks a Good Buy Today?

the S&P/TSX Composite Index rose 186 points in early afternoon trading on Wednesday, July 12. Meanwhile, the S&P/TSX Fixed Energy Index rose slightly in the same trading session. Bitumen production from oil sands mining reached a record high of 3.5 million barrels per day (MMb/d).

A recent snapshot from the Canadian Energy Regulator projects that bitumen production will continue to grow until 2040. It is estimated to reach 4.5 MMb/d by the end of the forecast period.

Today, I want to discuss whether these top Canadian oil sands stocks are worth getting as we approach mid-July. Let’s jump in.

This oil sands stock looked dirt cheap in the first half of July

Imperial Oil (TSX:IMO) is a Calgary-based company engaged in the exploration, production, and marketing of crude oil and natural gas in Canada. Shares of this oil sands stock are down 1.9% month over month at the time of writing. Its shares are up 2% year to date in 2023. Investors can see more of its recent performance with the interactive price chart below.

Investors can expect to see the company’s second quarter fiscal 2023 earnings later this month. In the first quarter of fiscal 2023, Imperial Oil posted net income of $1.24 billion – up $75 million from last year. The company posted earnings per share (EPS) of $2.13 compared to $1.75 in the first quarter of fiscal 2022.

Shares of this oil sands stock currently have a favorable price-to-earnings (P/E) ratio of 5.4. In addition, Imperial Oil offers a quarterly dividend of $0.50 per share. That represents a 3.1% yield.

Why you can trust Suncor for decades to come

Suncor Energy (TSX:SU) is another leading integrated energy company based in Calgary. Shares of this oil sands stock fell 1.4% last month. The stock is down 5.1% year to date.

The company released its first quarter fiscal 2023 earnings on May 8. Suncor reported adjusted funds from operations (AFFO) of $1.8 billion. Meanwhile, total oil sands production reached 675,100 barrels per day (bbls/d) in the first quarter of 2023 — down slightly from 685,700 bbls/d in the first quarter of fiscal 2022. Suncor announced the acquisition of TotalEnergies and the remaining working interest in Fort Hills.

Suncor stock is down 5.1% year to date through 2023. Shares of this oil sands stock currently have an attractive P/E ratio of 6.5. Meanwhile, Suncor offers a quarterly dividend of $0.52 per share, representing a solid 5.3% yield.

I will take another oil sands stock today

Natural Resources Canada (TSX:CNQ) is another Calgary-based company that extracts, explores, develops, produces, sells, and markets crude oil, natural gas, and natural gas liquids (NGL). Its shares were up 3.2% month over month in early afternoon trading on July 12. The stock is up 6.4% year to date in 2023.

In the first quarter of 2023, Canadian Natural Resources reported adjusted net income of $1.88 billion, or $1.69 per diluted share – up from $2.19 billion or $1.96 per diluted share in the first quarter of fiscal 2022. ot the company’s record natural gas production and liquid production in the quarter.

Shares of this oil sands stock have a favorable P/E ratio of 8.9 at the time of writing. Additionally, Canadian Natural Resources offers a quarterly distribution of $0.90 per share, representing a solid 4.7% yield.