Suncor (TSX: SU) just hit a new 12-month high. Investors who missed the rally in recent months are wondering if SU stock is still undervalued and good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) focused on dividends and long-term total returns.
Suncor share price
Suncor trades near $65 per share at the time of writing. The stock is up from $45 last April and hasn’t been this high since 2008.
Contrarian investors who had the courage to buy Suncor near $20 per share are enjoying the recovery. Suncor fell out of favour with the market in 2020 when it slashed the dividend in the early weeks of the pandemic in an effort to preserve cash flow. This upset investors who held Suncor for its previously reliable distribution.
Suncor eventually reversed the dividend cut once the oil market stabilized and has since raised the payout steadily. A new CEO took control of the business in the spring of 2023. In the past two years, Suncor has made good progress on its turnaround efforts.
The company cut staff to streamline operations and has improved efficiency. Suncor reported record production at its oil sands facilities in the third quarter (Q3) of 2025, while also delivering record throughput at the refineries. Suncor’s integrated business structure, with production, refining, and retail operations, historically attracted investors due to the balance the diversified revenue stream provided.
This structure is once again in focus as Canadian energy investors try to figure out how a surge in oil production in Venezuela will impact Canadian oil sands producers. Refineries on the U.S. Gulf Coast require the type of oil that is produced in both Canada and Venezuela. As the U.S. gets more supply from the South American country, there will potentially be a decline in the oil purchased from Canada.
The continued momentum in Suncor’s share price in recent days suggests the market expects the company to see limited negative effects from recent developments in Venezuela.
Risks
Oil prices are down considerably from the 2025 high. In fact, West Texas Intermediate (WTI) sells for less than US$60 per barrel compared to more than US$80 a year ago. Analysts broadly expect oil prices to remain under pressure through 2026, barring major supply disruptions caused by geopolitical events. Production in Canada and the United States is at record levels. At the same time, OPEC is increasing output to try to recoup lost market share. On the demand side, China’s economy remains under pressure due to challenges in the property market and the impact of U.S. tariffs. Global oil demand is still on the rise, but analysts predict surplus conditions over the near term.
Opportunity
Canadian oil producers are already benefitting from the boost in export capacity that came with the opening last year of the Trans Mountain expansion. The developments in Venezuela could push the Canadian government to get another pipeline built to connect Alberta’s producers to the coast. This would enable Suncor and its peers to boost output and sell oil at higher prices to global buyers, without relying as much on the United States.
Time to buy SU stock?
The turnaround plan is going well, and Suncor’s integrated business structure means it is less exposed to large negative moves in the oil market. Near-term volatility is expected, so a better entry point could emerge in the coming weeks, but oil bulls should be comfortable owning Suncor at the current price, even after the big run. For income investors, the 3.7% dividend yield pays you well to ride out market turbulence.
