The energy industry often experiences large tailwinds during times of inflation thanks to rising commodity prices. As energy prices soar, energy companies can enjoy higher revenues, better margins, and improved earnings, which can translate to a higher valuation and share price.
Let’s break down what energy stocks are and if they’re a good choice for Canadian investors.
Related: List of stocks in the TSX energy sector
What are energy stocks?
Energy stocks are those companies involved in the production, processing, and sale of energy products, such as fossil fuels (natural gas, crude oil, refined petroleum products) and renewable sources of energy (wind, hydro, solar). Also included are companies that produce energy machinery and equipment, and those that provide support services like logistics and staffing.
As a commodity, the price of energy is elastic, meaning that it is heavily influenced by supply and demand, which can be
