Power was the third top-performing sector on the TSX in 2025, after fundamental supplies and financials, and in a good race with know-how. As of January 19, 2026, power is up practically 6% to date, although there’s cautious optimism. The priority proper now and potential long-term draw back threat is the revival of Venezuela’s oil manufacturing.
The specter of elevated competitors is actual, however the activity forward for the U.S. is big. Canadian producers are carefully monitoring the value of a barrel, a perennial headwind. In the meantime, a mid-cap inventory centered on service depth entered 2026 with a big tailwind.
Sturdy purchase
Market analysts advocate a “sturdy purchase” for CEU Power Options (TSX:CEU). CEU trades at $13.77 per share following a virtually 55% advance within the final six months. The 2024 TSX30 winner (ranked fourth) has rewarded traders with a considerable 430.22% return over the previous three years.
The $2.88 billion firm offers technology-driven merchandise to assist exploration and manufacturing corporations drill extra effectively. Furthermore, the specialised chemical options it offers for the complete oil and gasoline lifecycle, together with drilling fluids, are appropriate for numerous geological formations and drilling strategies.
Concerning the depth service issue, oil and gasoline corporations require extra chemical substances and fluids to drill aggressively and deeper, no matter commodity value fluctuations. For hauling and transport of its merchandise, CES Power owns and operates an intensive fleet of tankers, vehicles, and trailers.
CES operates state-of-the-art analysis and improvement services, together with satellite tv for pc laboratories, that present routine analytical providers in service areas throughout North America. These satellite tv for pc laboratories are geared up with important instrumentation and sure specialised gear, relying on formation necessities.
In response to administration, CES Power’s totally built-in world-class fundamental chemical manufacturing functionality is a aggressive benefit. The growing demand for drilling chemical substances is a progress driver.
Monetary efficiency
CES Power is in a candy spot as a result of the excessive service depth degree in the present day requires complicated drilling fluids and manufacturing chemical know-how. Within the third quarter (Q3) of 2025, income elevated 3% yr over yr to file $623.2 million. Nevertheless, because of larger depreciation bills, internet earnings declined 13% to $405 million in contrast with Q3 2024.
The corporate notes that financial uncertainty and ongoing world conflicts have affected the near-term dynamics of power provide and demand. Luckily, power demand stays resilient, whereas trade fundamentals assist vital drilling and manufacturing exercise in oil and pure gasoline.
Lastly, the asset-light enterprise mannequin generates important free money stream via all factors of the cycle.
Progress plus earnings
Giant-cap shares Enbridge, Canadian Pure Assets, and Suncor Power are stable funding choices and beneficiant dividend payers, however none of them can match the momentum of CES Power Options. The enterprise thrives on service depth, not oil costs. From all indications, it’s more likely to outperform the power giants in 2026.
The highest-tier mid-cap inventory is good for earnings and progress investing. Had you invested $7,000 in CES three years in the past, your cash could be value $36,790 in the present day. Moreover the potential for enormous capital good points, potential traders can profit from the modest however protected 1.23% dividend (19.9% payout ratio).
