Fort McMurray had a soggy second quarter in 2026. Suncor Energy (TSX: SU) CEO Rich Kruger said rain and snowmelt were the highest in more than 30 years, running 50% above the 10-year average.
That weather impacted mining productivity across the region. Suncor said it cut output by an estimated 50,000 to 60,000 barrels per day. Canadian Natural Resources (TSX: CNQ) said its teams had to manage haul roads through the same conditions.
Both companies still posted strong cash flow and paid their shareholders. But one of them has a dividend story that is hard to beat.
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How Suncor handled record rain in Fort McMurray
Suncor CEO Rich Kruger opened his call with a joke about Noah’s Ark. The rain stopped after 40 days in the Bible, he said. In Fort McMurray, it kept going all quarter.
Suncor estimated the weather cut production by 50,000 to 60,000 barrels per day even as upstream output came in at 761,000 barrels per day.
Further, the company posted adjusted funds from operations (AFFO) of $5.3 billion, or $4.52 per share. Its downstream business set a record at $2.3 billion, while the energy giant ended Q2 with a net debt of $4.5 billion.
Given a quarterly dividend of $0.60 per share, the payout ratio for the TSX dividend stock was less than 20%, allowing it to strengthen its balance sheet. Suncor pays shareholders an annual dividend of $2.40 per share, up from $0.52 per share in 2012.
Management said production recovered quickly as preliminary July output was about 870,000 barrels per day.
Suncor returned $1.8 billion to investors in Q2, which includes $1.1 billion in buybacks and $706 million in dividends. It plans to lift buybacks to $500 million per month, up from $275 million at the start of the year.
Why Canadian Natural Resources keeps raising its dividend
Canadian Natural faced the same weather turbulence and still set eight operational and financial records.
Total production hit about 1,677,000 barrels of oil equivalent per day, up 18% from a year ago. Oil sands output reached a company record of roughly 625,000 barrels per day, with upgrader use at 106%.
Adjusted funds flow was $6.9 billion, or about $3.30 per share, while adjusted net earnings were $4.6 billion.
Canadian Natural returned about $2.4 billion in the quarter, split between dividends ($1.3 billion) and buybacks ($1.1 billion). It also reduced net debt by $1.6 billion in Q2.
The board approved a quarterly dividend of $0.53 per share, the 26th straight year of increases.
President Scott Stauth also addressed spending on growth. Projects like Pike 2 and Jackfish are on hold until government agreements are finished. His message on payouts was clear. “Our shareholder returns will not be sacrificed,” he said.
Management expects to hit a $13 billion long-term debt target in early 2027, after which it plans to send 100% of free cash flow to buybacks, up from 75% currently.
Canadian Natural vs. Suncor: Dividend growth, cash flow and risks
Both Canadian companies are cash machines and have strong balance sheets.
Canadian Natural has a long record of raising its dividend every year, while Suncor leans on buybacks. Moreover, Suncor was forced to lower its dividend during the COVID-19 pandemic.
Suncor lost up to 60,000 barrels per day to weather, while Canadian Natural has a turnaround coming in the second half of 2026, so investors should expect a softer quarter ahead.
Oil prices are the bigger swing factor for both stocks. Suncor said West Texas Intermediate averaged US$93 in Q2, but it ended the quarter under US$70.
A lower oil price would squeeze cash flows at either company.
My dividend pick through 2026
If dividend growth is my goal, I would own Canadian Natural Resources. The reasons are simple. It has a 26-year streak of raises, record production, and a clear path to even larger buybacks.
Suncor is an excellent operator, and I would not argue against owning it for buyback growth. I would just rather get paid in dividends I can count on.
