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Canadian Oil Stocks

JJM03 |

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When researching oil stocks, which stocks do you think of? The household names you see on gas stations as you drive by? Maybe some overseas oil company you read about? Maybe you should look north of the United States and invest in Canadian oil stocks.

Since the United States gets most of its imported oil from Canada, maybe that is where we should invest if we want to buy oil stocks. We import about 2 million barrels each day of Canadian oil, by far the largest amount that any other country we import oil from.

Investing in Canada provides a safe haven for oil investment. The government is stable up there. An investor would rather invest in countries with a stable political system. Why risk investing in a country where a dictator could take over the assets of an oil company over night? With Canada, you do not have this problem.

There are many ways to invest in Canadian oil and gas stocks. One way would be to look for mutual funds that invest solely in Canadian oil stocks. Another very popular way is to invest in oil trust funds. These are oil companies that are set up to throw off dividend each month. I have seen yields on these funds ranging from around 3% to well over 10%. These can be a great way to provide you with a monthly income. As with any investment, just don't go chasing yields. Look at the underlying company to make sure it is healthy and will be able to continue to pay those dividends.

There is an interesting exchange trade fund that is made up of a basket of these oil income funds. It is an ETF put out by iShare called the CDN Income Trust Sector ETF (XTR). This fund invests about 65% of the fund in energy trusts. This fund pays a dividend each quarter.

You may want to invest in individual stocks instead. One of the largest Canadian oil companies is Suncor. This stock trade on both the New York and Toronto Exchanges. The symbol for the stock in New York is SU. Suncor is an integrated energy company and is also a big investor in the Canadian oil sands. Suncor is also involved in natural gas production and exploration.

EnCana is another Canadian oil stock that trades on the NYSE. Its ticker symbol is ECA. It owns gas and oil field in North America.

Canadian oil stocks offer many opportunities to invest in. Take a look up north to our neighbor and consider investing in Canadian oil and gas stocks.