In a world of energy crises, Canada shines as one of the few countries with untainted energy reserves. Canada’s energy sector is likely to see significant growth in 2026 as the government looks to diversify export markets. At the center of this evolution is Suncor Energy (TSX:SU), an integrated oil company reaping the benefits of reduced costs per barrel and substantial oil exports.
Source: Getty Images
A Canadian energy stock poised for growth in 2026
Suncor Energy stock is poised for growth in 2026 because of its integrated structure. The company extracts oil, refines it in its refineries, and retails it through Petro Canada. This complete control over the supply chain helps it optimize its operations and reduce its breakeven cost. In 2025, Suncor Energy reduced its breakeven cost by US$10/barrel compared to 2023.
Key catalysts driving Suncor’s growth in 2026:
- Firstly, the management aims to buy back $275 million worth of shares per month, which converts to $3.3 billion in 2026.
- Secondly, Suncor Energy has not made any major capital investments, and neither does it plan to do so in 2026. This could help it improve refining capacity, keep costs down, and invest in technology and optimization.
- Thirdly, the company has reduced its net debt to 0.5 times its funds from operations by increasing funds from operations.
- Lastly, Suncor has achieved financial resilience even in a less than US$45/barrel WTI business environment. Every US$1 per barrel increase in the WTI oil price could add $215 million to its funds from operations.
Canada’s Energy and Suncor’s strategic position
Canada’s move to diversify export markets to non-US countries and the Trans Mountain Pipeline expansion could open new markets for Suncor Energy. The Canadian government is pushing investment in the oil sector by cancelling the proposed oil and gas emissions cap.
The global shift in the energy supply chain puts Suncor Energy at an advantageous position. Its share price has already surged 25% so far this year amidst the geopolitical tensions. More growth is likely as oil trades at a geopolitical premium. The demand for a safe and assured oil supply will drive growth in 2026.
Suncor Energy: A dividend growth opportunity
If 2026 were to see a repeat of 2022 supply shocks, Suncor Energy shareholders could see significant upside and strong dividend growth in 2027. At a time when other dividend growth stocks are slowing their growth rate, Suncor has accelerated the dividend growth rate from 4.6% in 2025 to 5.3% in 2026, even after the 10% tariff on oil exports to the United States.
While many growth stocks lack a dividend reinvestment plan (DRIP), Suncor offers this advantage, compounding investor income. Historically, Suncor has raised its dividend in 22 out of the past 24 years, averaging an impressive 17% annual increase.
Harness the power of DRIP with Suncor
By embracing the DRIP and investing in a robust dividend growth stock like Suncor, you empower your portfolio to weather economic storms. For instance, if you had purchased 100 Suncor shares in January 2020 for $4,277, and opted for DRIP, your dividend would have tripled from $109.50 at the end of 2025 to $307.80 at the end of 2026. And the value of those 100 shares would be $7,800.
| Year | SU Dividend/Share | SU Stock Price on January 1 | Dividend Amount | DRIP Shares | Total Share Count |
| 2026 | $2.40 | $60.90 | $307.80 | 4.63 | 128.25 |
| 2025 | $2.28 | $52.02 | $281.86 | 4.97 | 123.62 |
| 2024 | $2.18 | $42.89 | $258.66 | 5.49 | 118.65 |
| 2023 | $2.08 | $42.73 | $235.38 | 4.77 | 113.16 |
| 2022 | $1.88 | $32.50 | $203.78 | 3.39 | 108.39 |
| 2021 | $1.05 | $21.56 | $110.25 | 5.08 | 105.00 |
| 2020 | $1.10 | $42.77 | $109.50 |
In investing, the fundamentals of the company matter. In turbulent times, doing nothing can be the best strategy if you’re confident in your robust holdings. For more insights and investment strategies, subscribe to our newsletter and stay ahead of market trends!
