Should you invest $1,000 in Canadian Natural Resources right now?

Before you buy stock in Canadian Natural Resources, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian Natural Resources wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

Should You Buy Suncor Energy (TSX:SU) Post-Earnings?

Suncor Energy (TSX:SU) will release its third-quarter earnings today, and there doesn’t seem to be any optimism among investors. Will the earnings spark some buying in Suncor stock? 

| More on:

Canada’s largest integrated oil company Suncor Energy (TSX:SU)(NYSE:SU) is releasing its third-quarter earnings today. The overall tone for the oil industry is bearish, but it is better than what it was in the second quarter. Oil prices have recovered from -$37/barrel in April to $38/barrel in October. The oil prices are volatile, as there is uncertainty in the oil demand.

The third quarter is better than the second quarter 

Oil demand depends on fuel and gasoline consumption. With rising COVID-19 cases in the U.S., Europe, and Canada, the governments are tightening travel restrictions. The third quarter was far better for oil companies than in the second quarter. Oil demand and oil prices increased as economies reopened, and domestic air travel saw some increase.

In the second quarter, all oil companies reported inventory valuation loss, as they spent more than $38 per barrel to extract that oil, and then a dip in oil prices forced them to sell it at a lower price. In the third quarter, these inventory losses reduced as oil prices surged, and companies cut their costs.

BP (NYSE:BP) reported a loss of US$0.5 billion in the third quarter against US$16.8 billion in the previous quarter of 2020. This stark difference was because of the absence of impairments and writedowns. After adjusting for fair value and non-operating cost, BP made a net profit of US$100 million.

Will Suncor post a profit in the third quarter? 

In the second quarter, Suncor reported a net loss of $614 million, after excluding $397 million in inventory loss. But it included $478 million in foreign exchange gain. Its inventory losses have slowed in the third quarter, which could result in a reduction in losses.

However, Suncor might not return to profit as early as the third quarter. The analysts expect Suncor to report -$0.14 EPS in the third quarter. Even investors are bearish around the third-quarter earnings, with the stock down 4% so far this week. Moreover, the second wave of the pandemic could plateau Suncor’s recovery in the fourth quarter.

Should you buy Suncor stock? 

The oil stocks have been falling. Even after BP’s slightly better earnings, its stock fell 1.8% on the London Stock Exchange. Oil companies around the world need to show a lot more profit to revive investor confidence.

If you are looking for a five- to 10-year investment horizon, Suncor can deliver value. That is the very reason why Warren Buffett purchased the stock. Unlike Air Canada, Suncor may not go bankrupt, as its losses are controlled. Its inventories have a long life. The only problem is storage, as its products are highly flammable. Suncor’s losses are slowing with an increase in demand.

Suncor has accelerated its move to a Suncor 4.0 program that improves its overall cost structure. The new program will use a smaller workforce and leverage improved data technology and business processes to improve operating efficiency. The implementation of this program could take a year. This will help it reduces losses in a downturn and improve profits in an upturn, making it more competitive.

When the oil demand recovers in the next two to three years, the new Suncor would probably be more profitable. Moreover, it has cut its dividend per share by 55%. In the recovery phase, the company would increase its dividend per share. After recovery, the next 10-year outlook is bright. But this outlook hinges on how it withstands the coming two years of a downturn.

Suncor in the long term

Warren Buffett has less than $320 million worth of Suncor shares. In the best-case scenario, Suncor won’t cut dividends any further, and its stock will recover to its pre-pandemic level in five years. From the sixth year onwards, it might start increasing its dividend per share. If you invest $5,000 in this stock, you can earn $11,295 in five years ($1,295 in dividend income and $10,000 in capital appreciation).

For the next two years, you can earn $518 in total dividend income. While this income might look good, better Dividend Aristocrats are trading on the Toronto Stock Exchange that are still earning profits and can grow dividends even in a downturn.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Puja Tayal has no position in any of the stocks mentioned.

More on Dividend Stocks

man touches brain to show a good idea
Dividend Stocks

The Smartest Canadian Stock to Buy With $1,500 Right Now

Restaurant Brands International (TSX:QSR) stock could be a great pick-up with $1,500 this spring!

Read more »

Canada day banner background design of flag
Dividend Stocks

The Top Canadian Stocks to Buy Right Now With $5,000

These three Canadian stocks are top choices, especially for those wanting growth with a $5,000 investment.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

Retirees: 2 Top Dividend Stocks for TFSA Passive Income

These stocks have increased their dividends annually for decades.

Read more »

top TSX stocks to buy
Dividend Stocks

Dip Buyers Could Win Big: The Top Canadian Stocks to Buy Now

These Canadian stocks are top options for investors looking for strength, income, and more in the future.

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

2 Cheap TSX Stocks to Watch in 2025

These top TSX stocks might be oversold.

Read more »

sale discount best price
Dividend Stocks

2 High-Yield TSX Stocks Now on Sale

These stocks have good track records of dividend growth and now offer high yields.

Read more »

woman analyze data
Dividend Stocks

A 9% Dividend Stock Paying Cash Every Single Month

This dividend stock remains an essential staple for investors, which is what makes it a top passive-income choice.

Read more »

Canadian Dollars bills
Dividend Stocks

This Dividend Stock Paying 6.4% Monthly Income Looks Undervalued

A Canadian REIT trading at a 15% discount to NAV just raised its payout—and its resilience shines in Q1 2025…

Read more »