Suncor Energy has seen a 22% increase in its stock price over the past year, prompting investors to consider whether the stock is still undervalued and a good addition to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) focused on dividends and total returns.
Currently trading near $53.50, Suncor’s stock recently experienced an 8% jump due to a spike in oil prices driven by geopolitical concerns. This reversal in the price of oil comes after a six-month decline. Despite the volatility in the oil market, Suncor has remained resilient, with plans to increase production by 100,000 barrels per day through 2026 and a focus on reducing net debt and executing share buybacks.
The company’s operational results have shown improvements, with management making strategic decisions to enhance profitability and drive growth. The opening of the Trans Mountain pipeline expansion has provided Suncor with better access to global markets, leading to improved oil prices and resolving past pipeline bottlenecks.
Suncor’s recent dividend increase of 5% for 2024, resulting in a 4% yield at the current share price, indicates a positive outlook for investors. Despite past challenges, the company’s commitment to enhancing shareholder value and regaining investor confidence through effective management strategies has positioned it well for future success.
While Suncor may be a solid pick for investors bullish on the oil industry, those with a bearish outlook due to geopolitical risks and potential oversupply should assess other investment opportunities. The stock’s performance may be influenced by global economic conditions and oil market dynamics, making it important for investors to carefully evaluate their risk tolerance and investment objectives before making a decision.
