Among the top sectors many investors continue to focus on, energy remains pivotal to the discussion for most long-term investors. The companies operating in this space provide investors with great exposure to long-term trends. Simply put, if the economy is growing, companies and individuals are going to use more energy. That’s just a fact of life.
Of course, long-term energy consumption trends are one thing. For traditional fossil fuel producers, there’s been a long-standing overhang around renewable energy sources that’s provided a drag on valuations for some time. And that’s to say nothing of energy prices. The volatility in this space has been incredible, particularly during previous market-wide shocks. Remember the pandemic?
Here’s why the company looks like a top undervalued stock worth buying right now and why I’m bullish on this stock despite its recent performance shown below.
Source: Getty Images
Suncor
Suncor (TSX:SU) is a top integrated Canadian energy company focused on the production and delivery of oil and gas (and their finished products) to consumers around the world. The vast majority of the company’s operations take place in Alberta, though this is a company with a footprint around the world and some offshore drilling exposure as well.
Despite being down nearly 3% to start 2025 and roughly flat over the past year (as seen in the above chart), Suncor remains among the most undervalued energy producers in its class. With a forward price-to-earnings ratio of around 11 times and strong cash flow generation, one has to think that this stock is worth at least worth considering at current levels.
What’s interesting is that I’m not the only investor who thinks the same way. In fact, Suncor’s multiple has actually increased in recent quarters as more investors have jumped aboard the bandwagon and are willing to pay higher prices for a portion of Suncor’s future earnings potential.
I think that’s due partly to the reality that the Trump administration will likely leave Canadian energy alone, and Suncor’s pivotal role in providing energy security for North America. The bottom line is that I think this is a space that should still see love, regardless of the ongoing tariff concerns rattling the market.
Is this stock a ticket to millionaire status?
As is the case with most investing, the process of putting one’s money to work should be boring. For stock pickers looking to overload their portfolios with exposure to particular companies, picking those with the right valuation metrics is among the most important tasks to take on.
In the case of Suncor, a solid argument can be made that this is a fundamentally strong energy producer in a corner of the market that should actually see some stability in the quarters and years to come. So long as oil prices continue to hover in a band of around +/-$20 per barrel from here, this stock looks uniquely positioned for upside — at least, that’s my take right now.
Of course, a number of macro headwinds could derail this thesis. But over the long term, assuming energy prices continue trending higher or at least stabilizing, Suncor is a top energy stock that could indeed be a cornerstone position in a million-dollar portfolio for those with a long-term investing time horizon.
