Canadian Energy Stocks: Suncor Stock vs. Cenovus Stock

These two energy stocks are top options for investors wanting income that pays now and in the future, but which comes out on top?

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 28, 2025 9:30 pm EST

When it comes to Canadian energy heavyweights, Suncor Energy (TSX:SU) and Cenovus Energy (TSX:CVE) often steal the spotlight. Both are titans in the oil and gas sector, but how do they stack up against each other? With recent earnings reports rolling in, now is a great time to compare these two industry giants to see which one might be the better pick for investors looking for long-term growth and stability.

A worker overlooks an oil refinery plant. — Source: Getty Images

The numbers

Suncor stock recently reported its fourth-quarter results, delivering an adjusted profit of $1.25 per share. This beat analyst expectations of $1.10. The impressive performance was largely driven by increased oil production and strong sales of refined products. Suncor’s integrated model, which includes both upstream and downstream operations, has helped cushion the company against the volatility of crude oil prices.

Cenovus faced a rougher earnings season, reporting a 56% drop in third-quarter profit due to lower production and weaker commodity prices. The company’s net income came in at $820 million, significantly lower than the $1.86 billion it posted in the same quarter last year.

Production numbers tell a similar story. Suncor stock’s upstream production climbed to 875,000 barrels per day in the fourth quarter, up from 808,000 barrels per day the previous year. At the same time, the company set a record for refined product sales, highlighting its ability to maximize revenue across multiple segments.

Cenovus, meanwhile, saw its upstream production drop to 771,300 barrels of oil equivalent per day in the third quarter, down from 797,000 barrels per day a year ago. This decline was mainly due to planned maintenance activities, which temporarily slowed operations. While necessary for long-term efficiency, these interruptions affected short-term financial results.

Future focus

From a financial perspective, Suncor stock appears to be on more stable ground. The company’s strong earnings have reinforced its balance sheet, giving it room to navigate future market swings with confidence. It has also reaffirmed its forecast for higher production in 2025 while keeping spending in check. This disciplined approach bodes well for investors looking for both reliability and growth potential.

Cenovus, while facing recent setbacks, has now completed its major maintenance projects and is working on optimizing its existing assets. The company remains committed to improving operational efficiency, which could help boost its profitability in the coming quarters.

Looking ahead, Suncor stock is well-positioned to capitalize on an improving energy market. With plans to increase production by as much as 5% in 2025, the company continues to benefit from its diversified business model. Its ability to refine and sell its own crude oil gives it an advantage over pure upstream producers, particularly in times of price fluctuations.

Cenovus, in contrast, is focusing on improving efficiencies and leveraging its existing assets now that maintenance disruptions are behind it. While the company still has strong long-term potential, investors may need to be patient as it works through the aftereffects of a challenging quarter.

Bottom line

Another key differentiator between the two companies is how they reward shareholders. Suncor stock has a strong track record of paying consistent and growing dividends, currently offering a yield of around 4.1%. This makes it an attractive option for income-focused investors looking for stability in the energy sector. Cenovus, while offering a lower dividend yield at 3.3%, has historically focused more on reinvesting in its operations. The company has been more aggressive in repurchasing shares, which can help drive long-term value but requires a longer investment horizon.

Both companies have faced a fair share of challenges over the years, but Suncor stock has shown a stronger ability to navigate market volatility. Its diversified revenue streams and refining capabilities give it a level of resilience that Cenovus lacks. That’s not to say Cenovus isn’t a worthwhile investment. Its lower valuation and potential for operational improvements could make it an interesting option for investors who are willing to take on more risk in exchange for higher potential returns.