The current market volatility offers attractive opportunities for bargain hunters. While the short-term outlook for businesses looks uncertain due to the COVID-19 pandemic, things will likely become normal in the long term. In such a scenario, it is best to focus on fundamentally strong companies with solid balance sheets and proven track records to deliver in uncertain times. Such companies should survive the near-term challenges and provide handsome returns in the long term.

Of all the market sectors, the energy sector is probably the worst hit. Excess supply combined with a weak demand sent oil prices to their lowest levels in 18 years. While the near-term outlook for the sector looks bleak, there are stocks available at attractive prices for those who can wait for the markets to turn favorable. Two such stocks are Chevron (NYSE:CVX) and TC Energy (NYSE:TRP).

Pump jack and a black barrel on US USD dollar notes.

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Chevron: A stock to own for the long term

Clearly, energy stocks are facing the toughest time in decades, if not in centuries. If lower oil prices persist, Chevron and its peers will need to slash their dividends. However, considering that Saudi Arabia and Russia cannot keep burning their pockets forever, there is a fair chance that oil prices will recover in the coming months. If that happens, Chevron is one of the best-placed companies to benefit due to its strong balance sheet.

Unlike ExxonMobil, Chevron has long been focusing on investments with short cycles but high returns. In response to the challenging environment, Chevron has already reduced its 2020 planned capital expenditures by 20%. The company has also reduced its 2020 guidance for Permian Basin production by 20% and has suspended share repurchases. These measures are indeed in the right direction as they save capital when investing it may not generate needed returns.

But if oil prices remain plummeted for long, the recently announced measures may not be enough for Chevron. According to the company, it can generate enough cash from its operations to cover its dividends as well as capital and exploratory expenditures if Brent prices are at or above $55 per barrel. But that price level looks unlikely in the near term.

Both the above scenarios -- of oil prices remaining where they are or rising above Chevron's dividend breakeven -- look extreme. Prices will likely slowly recover but may not reach to their 2019 levels soon. Demand destruction due to coronavirus spread may keep a lid on oil prices, even if Russia and Saudi Arabia agree on production cuts. In such a scenario, Chevron will need to cut production costs per barrel and sell high-production cost assets. Depending on how the prices move, the company may ultimately need to cut dividends. However, Chevron is committed to keeping dividends intact to the extent possible.

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Even if dividends are cut, Chevron's shareholder-friendly approach means the company would be more than eager to increase payouts again when things improve. Admittedly, there are risks involved, but for those who can afford to take calculated risks, Chevron offers a very attractive opportunity right now.

TC Energy: Attractive yield at a low risk

In uncertain times like today, investing in low-risk businesses makes a lot of sense. TC Energy derives roughly 95% of its earnings from regulated assets or long-term contracts. Some of its key pipelines, such as the NGTL System and the Canadian Mainline, as well as its U.S. natural gas pipelines, operate under regulated rate bases. Further, the company's other key assets, including Coastal GasLink and Mexico natural gas pipelines, have average contract terms of more than 20 years. Its Bruce Power Life Extension project has an average contract term of more than 40 years. Moreover, TC Energy's operations are diversified across natural gas, oil, liquids, and power generation, and across the U.S., Canada, and Mexico.

This low-risk business model allows TC Energy to raise its earnings even in challenging business environments. Indeed, the company has raised its dividends for 20 consecutive years. Another key advantage that TC Energy enjoys is the critical demand that its pipelines serve. The company provides much-needed infrastructure to transport oil from Canada's oil sands to refineries along the Gulf Coast.

TC Energy's debt-to-EBITDA ratio is within its targeted range of less than 5 times. For 2019, the company paid roughly 40% of its cash from operations as dividends. Overall, with its diversified low-risk operations, conservative leverage, and strong coverage, TC Energy is better protected from the oil-price volatility than most of its peers.