Suncor Stock vs. Cenovus Stock #CanadaFinance

Written by Amy Legate-Wolfe at The Motley Fool Canada

When it comes to Canadian energy heavyweights, Suncor Energy (TSX:SU) and Cenovus Energy (TSX:CVE) often steal the spotlight. Both are titans in the oil and gas sector, but how do they stack up against each other? With recent earnings reports rolling in, now is a great time to compare these two industry giants to see which one might be the better pick for investors looking for long-term growth and stability.

Suncor stock recently reported its fourth-quarter results, delivering an adjusted profit of $1.25 per share. This beat analyst expectations of $1.10. The impressive performance was largely driven by increased oil production and strong sales of refined products. Suncor’s integrated model, which includes both upstream and downstream operations, has helped cushion the company against the volatility of crude oil prices.

Cenovus faced a rougher earnings season, reporting a 56% drop in third-quarter profit due to lower production and weaker commodity prices. The company’s net income came in at $820 million, significantly lower than the $1.86 billion it posted in the same quarter last year.

Production numbers tell a similar story. Suncor stock’s upstream production climbed to 875,000 barrels per day in the fourth quarter, up from 808,000 barrels per day the previous year. At the same time, the company set a record for refined product sales, highlighting its ability to maximize revenue across multiple segments.

Cenovus, meanwhile, saw its upstream production drop to 771,300 barrels of oil equivalent per day in the third quarter, down from 797,000 barrels per day a year ago. This decline was mainly due to planned maintenance activities, which temporarily slowed operations. While necessary for long-term efficiency, these interruptions affected short-term financial results.

From a financial perspective, Suncor stock appears to be on more stable ground. The company’s strong earnings have reinforced its balance sheet, giving it room to navigate future market swings with confidence. It has also reaffirmed its forecast for higher production in 2025 while keeping spending in check. This disciplined approach bodes well for investors looking for both reliability and growth potential.

Cenovus, while facing recent setbacks, has now completed its major maintenance projects and is working on optimizing its existing assets. The company remains committed to improving operational efficiency, which could help boost its profitability in the coming quarters.

Looking ahead, Suncor stock is well-positioned to capitalize on an improving energy market. With plans to increase production by as much as 5% in 2025, the company continues to benefit from its diversified business model. Its ability to refine and sell its own crude oil gives it an advantage over pure upstream producers, particularly in times of price fluctuations.

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