Given the current state of global trade, investors are understandably paying close attention to how tariffs might affect investments. Recent news has raised concerns about U.S. tariffs impacting various industries, leading many to rethink their investment strategies. For those who want to reduce their exposure to risks related to these tariffs, Canadian companies that primarily operate within Canada could be an interesting option.
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Consider Suncor
One such company is Suncor Energy (TSX: SU), a major integrated energy company with its main office in Calgary. Suncor’s business includes developing, producing, and upgrading oil sands as well as offshore oil and gas production, petroleum refining, and marketing its products. Importantly, most of their refining capacity is located right here in Canada, with significant assets in Alberta and Quebec. This strong domestic focus could shield Suncor from the potential negative impacts of U.S. tariffs.
Looking at the most recent financial report for the last three months of 2024, Suncor showed strong performance. The Canadian stock reported adjusted funds from operations of $3.1 billion. This indicates a strong ability to generate cash. The net earnings for the quarter were $1.55 billion, or $1.14 per common share. This is a substantial increase compared to the $1.34 billion, or $0.96 Canadian per common share last year. These results really highlight how efficiently Suncor is operating and how resilient its financial situation is.
Suncor has also been actively working on increasing value for its shareholders. The Canadian stock increased its quarterly dividend by 10% to $0.52 per share. This was the second dividend increase within that year. In addition, Suncor bought back approximately $1.7 billion worth of its own shares in 2024, suggesting the Canadian stock has confidence in its financial health and its prospects for the future.
Looking ahead
The Canadian stock’s strategic efforts also include making operational improvements and managing costs effectively. In 2024, Suncor achieved a record annual production of 463,000 barrels per day from its Oil Sands operations, contributing to a total upstream production of 743,000 barrels per day. It also managed to realize about $400 million Canadian in cost and productivity improvements. This was even better than the initial goal.
From an environmental, social, and governance (ESG) perspective, Suncor has made notable progress. The Canadian stock reduced its greenhouse gas emissions intensity by 15% compared to its 2014 levels, thereby showing a commitment to sustainability and responsible resource development.
Analysts who follow Suncor generally have a positive view of the Canadian stock. Their focus on operating well, being disciplined in how they allocate their capital, and returning value to shareholders positions them favourably within the energy sector. Furthermore, Suncor’s significant operations within Canada provide a level of protection from international trade tensions and uncertainties related to tariffs.
Bottom line
For investors who are looking to navigate the complexities of global trade and reduce their risk related to tariffs, Suncor Energy appears to be a compelling option. The strong financial performance, strategic focus on operations, and the fact that most assets are in Canada offer a combination of stability and potential for growth. For those considering adjusting their portfolios in response to current trade policies, Suncor presents an opportunity to invest in a resilient Canadian stock with a history of delivering value to its shareholders.
