1 Canadian Dividend Stock Down About 14% to Buy and Hold Forever

A nearly 14% drop can make even a strong dividend stock look a little suspicious.

After all, investors do not usually see a pullback and think, “Lovely, my portfolio needed character development.” They wonder what went wrong, whether the dividend remains safe, and whether buying now means catching a bargain, or a falling bowling ball.

An energetic risk

This is especially true in energy. Oil stocks can look brilliant when crude prices rise, then suddenly moody when prices soften. Dividends help, but don’t erase commodity risk.

The International Energy Agency recently forecast global oil demand to decline by 1.1 million barrels per day (boe/d) in 2026, while global supply was expected to fall as well before rebounding in 2027. That means investors are dealing with a messy market, not a sleepy one. Oil prices can swing on demand, geopolitics, supply disruptions, and refinery margins, sometimes all before lunch.

So why look at any oil stock now? The answer comes down to quality. Dividend investors need a company that can survive rough oil markets, keep investing in its assets, and return cash to shareholders when conditions cooperate. That brings us to Suncor Energy (TSX:SU).

SU

Suncor is one of Canada’s largest integrated energy companies. It produces oil, upgrades bitumen, operates refineries, and sells fuel through Petro-Canada. That integrated model gives it more ways to make money than a pure producer. When oil prices soften, refining and retail can help offset some of the pain. Not all of it, because energy still likes drama.

The stock recently traded at about $83 on the TSX, down from its 52-week high of $96.53. That puts shares down about 14% from that peak, even though the business continues to generate significant cash.

The latest results show why long-term investors may want to pay attention. In the first quarter of 2026, Suncor stock generated $2.9 billion in free funds flow and returned more than $1.5 billion to shareholders through dividends and share buybacks. That is the key number. Free funds flow supports dividends, buybacks, debt reduction, and future investment. For a buy-and-hold dividend stock, cash does the talking. The rest is just investor theatre with spreadsheets.

More to come

Suncor also delivered record first-quarter upstream production of 875,000 boe/d and record first-quarter refining throughput of 498,000 boe/d. That points to stronger operations, not just a company waiting around for oil prices to save the day.

The valuation also looks reasonable after the pullback. Recent market data showed Suncor stock with a dividend yield of about 3%. Not a massive yield, but supported by a business returning cash through both dividends and buybacks.

The risk is obvious: oil prices. If crude weakens further, global demand disappoints, or refining margins fall, Suncor stock’s cash flow could come under pressure. Energy stocks also face long-term climate, regulatory, and capital-spending risks. No one should buy Suncor stock thinking it will behave like a utility with a hard hat.

Bottom line

Still, Suncor stock looks like one of the better Canadian dividend stocks for investors who want energy exposure without chasing a speculative producer. It owns major assets, generates serious cash, and keeps rewarding shareholders.

A pullback from recent highs gives long-term investors a better entry point than they had a few months ago. For those willing to ride the energy cycle, Suncor stock could remain a stock to buy, hold, and let the dividends do their thing for years.

The post 1 Canadian Dividend Stock Down About 14% to Buy and Hold Forever appeared first on The Motley Fool Canada.

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More reading

• 2 Dividend Giants That Look Attractive After Recent Pullbacks
• Suncor Stock vs. Enbridge Stock: Which Dividend Energy Stock Looks Better Now?
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• Suncor Stock vs. Enbridge Stock: Which Dividend Giant Is the Better Buy for 2026?
• What the Average Canadian TFSA Balance Looks Like at Age 50

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.