2 Recession-Resistant Energy Stocks to Consider in 2025

Key Points

• Enbridge gets 98% of its earnings from durable sources.

• Brookfield Renewable's long-term contracts backstop about 90% of its earnings.

• The energy companies also have lots of visible growth coming down the pipeline.

• 10 stocks we like better than Enbridge ›

Tariffs, slowing job growth, and other factors are raising concerns that we may be heading toward another recession. An economic downturn would likely impact energy demand, which would in turn weigh on energy stocks.

However, several energy companies have fairly recession-resistant business models. Two resilient energy stocks to consider this year if you're worried about an impending recession are Enbridge (NYSE: ENB) and Brookfield Renewable (NYSE: BEPC)(NYSE: BEP).

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Image source: Getty Images.

As durable as it gets

Enbridge operates one of North America's largest energy infrastructure businesses spanning liquids pipelines, gas transmission, gas distribution and storage, and renewable power. The Canadian pipeline and utility company has one of the lowest-risk business models in the energy sector. Cost-of-service agreements and long-term contracts backstop 98% of its cash flows. As a result, Enbridge produces very predictable results. It has achieved its annual financial guidance for 19 straight years, which includes two major recessions and several other turbulent periods.

The company's diversified business generates substantial cash flows. Enbridge pays out 60% to 70% of its stable cash flow via dividends (5.6% current yield). That provides investors with a solid base return, regardless of market conditions. The energy company retains the rest of its cash to reinvest in growing its business.

Enbridge currently has a massive backlog of commercially secured growth capital projects that should come online through the end of the decade. This backlog gives the company significant visibility into future growth. Enbridge expects to grow its cash flow per share by around a 3% compound annual rate through next year, with this growth accelerating to about 5% per year thereafter. This anticipated cash-flow growth underpins Enbridge's ability to consistently raise its dividend, which it has done for 30 straight years. It should have the fuel to grow its dividend by up to 5% annually in the coming years.

High-powered growth ahead

Brookfield Renewable is one of the world's largest renewable energy producers. The company sells 90% of the electricity it produces under long-term, fixed-rate power purchase agreements (14-year average remaining term) with utilities and large corporations. These agreements index about 70% of its revenue to inflation. As a result, Brookfield generates very stable and steadily rising cash flow, even during a recession, supporting its 4.4%-yielding dividend.

The company expects its existing power portfolio to deliver 4% to 7% growth in annual funds from operations (FFO) per share through the end of the decade. It sees this growth coming from inflation escalations and margin enhancement activities, such as signing higher-rate power purchase agreements (PPAs) as legacy ones expire. Meanwhile, Brookfield has a vast pipeline of renewable energy development projects under construction or in advanced stages, including a staggering 10.5 gigawatts it expects to deliver for Microsoft through 2030. These projects should add another 4% to 6% to its FFO per share each year as they come online.

Additionally, Brookfield has the financial flexibility to make acquisitions as opportunities arise. For example, it recently agreed to invest up to $1 billion to boost its stake in Colombian hydroelectric producer Isagen, which will add 2% to its FFO per share next year. Add it all up, and the company expects its growth drivers to power more than 10% annual FFO-per-share growth for the foreseeable future.

Brookfield's growing cash flow should support continued dividend increases, which the company expects to raise by 5% to 9% each year. This outlook aligns with Brookfield's stellar record of raising its dividend, which it has grown at a 6% compound annual rate since 2001.

Recession-resistant energy stocks

Growing recession fears threaten many energy stocks, but not Enbridge and Brookfield Renewable. Their low-risk models and secured growth provide resilient and predictable returns. If you want stability through the current uncertainty, these are standout energy stocks to consider buying this year.

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Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, and Enbridge. The Motley Fool has positions in and recommends Enbridge and Microsoft. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.