There are many top undervalued stocks for investors to consider in 2026, even with most global indices now trading at or near all-time highs.
In this space, I continue to think Suncor (TSX:SU) is one top Canadian energy stock that could be poised for big moves higher.
Here’s why I remain bullish on Suncor for the long term, and it surprisingly doesn’t have as much to do with rising oil prices as investors may think.
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Why is Suncor such a great opportunity?
To start, Suncor’s recent fundamentals have been more than solid.
The company just posted record numbers on the operational front. Suncor recently hit all‑time highs in upstream production, upgrader utilization, and refining throughput. Impressively, those results all came while Suncor announced the company has achieved its 2024 Investor Day targets a full year early.
Those targets included boosting normalized free cash flow by billions of dollars, lowering its corporate WTI breakeven by about US$10 per barrel, cutting net debt to around the $6–$8 billion range, and unlocking a framework whereby “all excess funds” now flow to shareholders. In other words, investors are looking at a structurally leaner operator with more barrels, lower costs, and a clearer capital‑return mandate than at any point in the past decade
What really sets up 2026 is Suncor’s plan to grow production while actually trimming capital spending. The company’s anticipated CapEx budget has been reduced from last year. That said, Suncor still expects to provide mine improvements and oil sands expansions.
If these projects continue as planned, these higher oil prices should translate into skyrocketing earnings in the coming quarters. While some of this is priced in right now, I’d argue there’s more lead left in the pencil for investors today.
Valuation matters
Despite this reset, Suncor still trades at a forward price‑to‑earnings multiple in the low‑teens. Currently, this number comes in at around 16 times trailing earnings. That’s very cheap for a stock with a 3.1% dividend yield and one of the best balance sheets in the oil patch.
In other words, for investors looking to generate exposure to one of the best blue-chip stocks in a sector that should continue to catch a bid for a very long time, Suncor looks like a top pick of mine right now.
This stock remains very cheap, despite ongoing geopolitical uncertainty I expect to continue. Thus, as both a defensive value, dividend and growth play, there’s a lot to like about how Suncor is positioned here.
