1 Canadian Energy Stock Set for Major Growth in 2026

Energy stocks could have a strong 2026 for a pretty simple reason: many producers have already done the hard work. After years of spending, streamlining, and improving operations, Canadian energy companies are now producing more while keeping a tighter grip on costs.

Add in better export access, decent shareholder returns, and the possibility of firmer oil prices if supply stays disciplined, and the setup looks a lot better than it did a few years ago. This is not a wild boom story, but more of a cash-flow-and-efficiency story, which can still be very powerful for long-term investors. So let’s look at one solid option on the TSX today.

SU

Suncor Energy (TSX:SU) is one of the clearest ways to play that theme. It is not just an oil producer. It’s a fully integrated energy company with oil sands production, offshore assets, refineries, and the Petro-Canada retail network. That gives Suncor stock more than one way to make money. When crude prices wobble, refining and retail can help smooth things out. That makes it a little sturdier than a pure upstream name.

Over the last year, the story around Suncor stock has been less about reinvention and more about proving the turnaround is real. Suncor stock has cemented its comeback from oil sands laggard to sector outperformer after a stretch of stronger production, refining, and cash flow. Management has kept pushing operating discipline, and investors have noticed.

There have also been a few concrete catalysts. Suncor stock entered 2026 guiding for higher upstream production of 840,000 to 870,000 barrels of oil equivalent per day (boe/d), while trimming capital spending to $5.6 billion to $5.8 billion. It also boosted planned share buybacks, sticking with its promise to return all excess funds to shareholders. In short, Suncor stock aims to produce more, spend a bit less, and send more cash back to investors. A pretty attractive combination.

Into earnings

The latest earnings show why the market keeps paying attention. In the fourth quarter of 2025, Suncor stock reported adjusted operating earnings of $1.3 billion, or $1.10 per share. Refining and marketing adjusted operating earnings jumped to $893 million from $410 million a year earlier, helped by higher crack spreads and stronger refinery production. Refining throughput hit a quarterly record 504,200 barrels per day, and refined product sales reached a fourth-quarter record 640,400 boe/d.

The full-year numbers were solid as well. Suncor stock generated $12.8 billion in adjusted funds from operations in 2025 and $6.9 billion in free funds flow. Total upstream production averaged 860,000 boe/d, while refinery crude throughput came in at 480,000 boe/d. It also returned $5.8 billion to shareholders through dividends and buybacks in 2025. That is the kind of financial muscle that gives a company options, even if oil prices do not shoot straight up.

Valuation does not look stretched either. Suncor stock trades at a price-to-earnings ratio of about 16 and enterprise value around $103.5 billion. That is not dirt cheap, but it also does not look excessive for a business with this kind of scale, cash flow, and shareholder return plan. The main risk is obvious: oil prices can still turn moody, and planned maintenance can weigh on results. Even so, Suncor stock looks built for a year where disciplined operators could keep winning.

Bottom line

If you want one Canadian energy stock poised for big growth in 2026, Suncor stock makes a strong case. It has a broad business, a much healthier operating story, rising production targets, and the cash flow to reward shareholders while still investing in the future. Plus, here’s what that stock could bring in through income alone on a $7,000 investment.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTSU$77.1390$2.40$216.00Quarterly$6,941.70

It may not be the flashiest stock on the TSX, but it looks like the kind you can buy now and feel good about holding for years.

The post 1 Canadian Energy Stock Set for Major Growth in 2026 appeared first on The Motley Fool Canada.

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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.