Suncor Energy (TSX:SU) spent much of the past year proving it can operate profitably even when oil prices aren’t at their peak. That sets the stage for potential upside if crude prices rebound. The dividend stock’s latest quarter showed a blend of operational strength and disciplined spending, even against the backdrop of softer benchmark pricing. So let’s look at whether Suncor stock now looks like a must-have among rebound stocks.
Into earnings
First, earnings. Net earnings came in at $1.1 billion, or $0.93 per share, down from $1.6 billion a year ago as weaker prices weighed on revenue. Adjusted operating earnings fell to $873 million from $1.6 billion in the same period last year, but production and refining volumes told a much more positive story.
Production hit a second-quarter record at 808,000 barrels per day, driven by strong oil sands output and higher offshore volumes. Refinery throughput reached a record 442,000 barrels per day, with refined product sales at a second-quarter high of over 600,000 barrels per day. These numbers show that Suncor isn’t just relying on commodity prices to generate value. It’s running its assets efficiently and at scale, which positions it to maximize gains if crude strengthens.
Financial discipline was another highlight. The dividend stock generated $2.7 billion in adjusted funds from operations. While down from $3.4 billion last year due to pricing, this still supported nearly $1 billion in free funds flow.
More to come
That cash allowed Suncor to return $1.45 billion to shareholders in the quarter through a mix of $750 million in share buybacks and $700 million in dividends. The quarterly dividend of $0.57 per share represents a yield above 4%, and management’s track record of consistent returns reinforces the investment appeal for income-focused investors. With debt well in hand, investors can be sure of that dividend’s safety. Now, a $10,000 investment could add $424 each year.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| SU | $53.49 | 186 | $2.28 | $424.08 | Quarterly | $9,947.14 |
One of the most notable developments this year was the completion of major maintenance. This operational execution helped reduce capital guidance for 2025 by $400 million, with full-year spending now expected between $5.7 billion and $5.9 billion. Lower capital needs without sacrificing performance is a clear positive. The dividend stock also achieved first ore at Syncrude’s Mildred Lake Mine Extension West ahead of expectations, a milestone that should sustain production levels going forward.
Considerations
Of course, the main risk for Suncor remains tied to oil prices. The second-quarter earnings decline was primarily driven by lower upstream price realizations. If crude prices remain weak, earnings and cash flow could stay under pressure, even with record production. However, that same leverage works in reverse. If prices rebound, Suncor’s high-volume, low-cost operations could generate significantly higher profits and free cash flow. Given the company’s integrated model, which includes strong downstream refining margins, it has more resilience than many pure-play producers when prices are volatile.
Looking at the year-to-date picture, Suncor’s first half of 2025 saw record production of 831,000 barrels per day and record refinery throughput of 462,000 barrels per day. While adjusted funds from operations for the first half fell from $6.57 billion to $5.73 billion, that still represents robust cash generation in a softer market. With capital spending reduced, debt trending lower, and operational performance at record levels, the dividend stock has a strong foundation heading into the back half of the year.
Bottom line
For investors, the thesis is straightforward. Suncor already delivered solid results in a challenging pricing environment. This makes its potential in a rising oil market even more compelling. The combination of high production efficiency, disciplined capital allocation, generous shareholder returns, and balance sheet strength means the dividend stock could benefit disproportionately if crude prices climb. While no energy company is immune to commodity swings, Suncor’s integrated operations and operational momentum give it an edge. For those looking to position ahead of a potential oil price recovery, it’s a name worth watching closely.
