For investors looking to invest in the Canadian market, the key focus is typically on financials, energy, and mining/resource stocks. Most investors come to the TSX for exposure to these areas, and Suncor Energy (TSX:SU) remains a top option worth considering.
The company’s stock chart above really highlights the kind of enthusiasm investors increasingly have about the Canadian energy sector. Trading right around its all-time high at the time of writing, it’s clear that Suncor’s value proposition is catching on with the market.
Let’s dive into whether Suncor deserves a spot in your portfolio right now.
Sky-high stock price
Suncor’s recent momentum has been impressive, particularly given all the volatility in energy prices in recent months. Now, geopolitical concerns have picked up, which bodes well for Suncor and its energy peers. However, it’s the company’s fundamentals that have really driven this rally. Even after surging to all-time highs recently, Suncor stock still trades around nine times earnings. That’s cheap for any company, even in the energy sector.
Notably, Suncor remains a top dividend stock as well, allowing income-focused investors to load up on shares of this oil sands giant. The company’s nearly 4% yield is also impressive, considering how far the stock has run this year.
So long as Suncor continues to see its debt load reduced (which management has been good about focusing on) and its fundamentals continue to improve, this stock is likely only headed higher over the medium term.
Bottom line
There’s a lot to like about how Suncor is positioned in the market right now. Canadian operators tend to produce lower-cost oil, which is likely to remain in high demand due to the geopolitical landscape. Until something shifts, I think Suncor Energy could be one of the safest bets in the market right now.
For those looking to lock in a 4% yield and gain exposure to a company with plenty of fundamentals-driven upside, this is a top pick in my books.
