Latest news with #SuncorEnergy
Forbes
7 days ago
- Business
- Forbes
Suncor Energy: From Sand To Profits
"Calgary, Alberta - April 2, 2012: Suncor Energy's head office in Calgary Alberta. Suncor is one of ... More the major developers of the Alberta Oilsands, as well as holding international developments in the North Sea, Libya, Syria, and Trinidad and Tobago." The United States is fully immersed in summer this week with scorching temperatures driving air conditioners into overdrive. A powerful heat dome has enveloped much of the country. This extreme weather event serves as a vivid reminder of how environmental factors, entirely outside of our control, can ripple through the economy and investor sentiment alike. Meanwhile, geopolitical tensions remain front and center on the global stage. At the NATO summit, member nations committed to increasing defense spending to 5% of GDP by 2035, which signals a significant shift toward bolstered military readiness. With both Europe and the United States reinforcing defense postures, the international security landscape appears to be entering a more assertive and dynamic phase. In such a charged environment, maintaining a cool and clear-headed approach to investing is essential. When headlines and market narratives have the power to sway emotions, rigorous and disciplined research becomes indispensable for investors focused on long-term success. After all, while the war drums are beating around the world, thoughtful decision-making remains the best way to navigate the markets. My latest Long Idea helps you do just that. The business benefits from long-term industry tailwinds and operational efficiency advantages. It returns significant capital to shareholders, and, best of all, its stock trades at a steep discount. I first made Suncor Energy (SU) a Long Idea in April 2023. Since my original report, the stock is up less than the S&P 500 even as the business generated billions in profits. After the company beat on the bottom-line but missed top-line 1Q25 estimates, my thesis remains intact, and this stock provides quality upside potential. SU still offers favorable Risk/Reward based on the company's: What's Working Long-Term Energy Demand is on the Rise, Oil is Still King While global energy demand will surely peak at some point, the fact remains that it is expected to rise through at least 2050. At the same time, the share of oil and gas in the energy mix is expected to stay above 53% (oil at 29% and gas at 24%) through 2050. OPEC's latest World Oil Outlook forecasts global primary energy to increase from 301 barrels of oil equivalent a day (mboe/d) in 2023 to 374 mboe/d in 2050, an increase of 24%. The three fuel types that are expected to see the largest increase in demand from 2023 through 2050 are renewables (43 mboe/d), gas (21 mboe/d), and oil (17 mboe/d). Suncor, as a leading renewable and oil provider, is positioned to benefit from this long-term trend for years to come. Figure 1: Growth in Global Energy Demand by Fuel Type: 2023 – 2050 Global Energy Demand Longer Reserve Life and Superior Efficiencies Suncor possesses a competitive advantage over other integrated oil and gas companies: it operates in oil sands instead of oil shales. Suncor's oil sand operations have a much longer a reserve life compared to oil shales. For instance, Suncor's oil sands reserve life sits at 25 years. Competitors, including BP, PLC (BP), Shell (SHEL), and TotalEnergies (TTE) have reserve lives of 7, 8, and 11 years, respectively. Not only does Suncor have longer reserve life, but it is consistently improving its ability to extract and process that oil and gas. Suncor's average annual refinery utilization rate consistently ranks above both U.S. and Canadian averages for the last decade. In fact, the company's average annual refinery utilization rate increased from 90% in 2023 to 100% in 2024. This improvement is a result of both record refinery utilization rates and record production across multiple facilities. See Figure 2. At its most basic level, utilization first begins with the ability to get material to refineries. Suncor excels in this regard because its facilities are connected directly via pipeline to both mining and in situ oil sand assets. The company also maintains direct access to different feedstocks via rail and marine, as well as the ability to process multiple crude types (depending upon facility). Figure 2: Suncor's Average Annual Utilization Rate vs. Industry Averages: 2015 – 2024 Suncor Energy Utilization Rate Leading in Profitability as Well Suncor's superior operational efficiencies manifest in the company's top-tier profitability. Suncor is the most profitable integrated energy company across the globe, among publicly traded competitors. Over the TTM, Suncor has the highest return on invested capital (ROIC) and second highest net operating profit after-tax (NOPAT) margin among competitors, which include TotalEnergies (TTE), Shell (SHEL), Exxon Mobil (XOM), Chevron Corp (CVX), and more. See Figure 3. Figure 3: Suncor's Profitability Vs. Peers: TTM SU Profitability vs Peers Improving Fundamentals Rising demand, improving efficiency, and high margins result in Suncor achieving growth across both the top and bottom-line. In fact, the company has grown revenue and NOPAT by 3% and 5% compounded annually since 2019 (pre-COVID). The company improved its NOPAT margin from 14% in 2019 to 15% in the TTM while invested capital turns rose from 0.4 to 0.5 over the same time. Rising NOPAT margins and invested capital turns drive the company's ROIC from 6% in 2019 to 8% in the TTM ended 1Q25. Additionally, the company's Core Earnings, a superior and cleaner earnings measure, grew 7% compounded annually from $3.3 billion in 2019 to $4.7 billion in the TTM. Figure 4 shows Suncor's revenue and NOPAT growth from 2015-TTM. Figure 4: Suncor's Revenue and NOPAT: 2015 – TTM SU Revenue & NOPAT 2015 - TTM Potential for 9%+ Yield Since 2021, Suncor has paid $7.7 billion (15% of market cap) in dividends and has increased its quarterly dividend from $0.17/share in 1Q21 to $0.42/share in 2Q25. The company's current dividend, when annualized, provides a 4.3% yield. Suncor also returns capital to shareholders through share repurchases. Since 2021, Suncor repurchased $9.9 billion (20% of market cap) worth of shares. During the first three months of 2025, the company repurchased $555 million worth of shares. The company renewed its annual normal course issuer bid (NCIB) for 2025, which allows the company to repurchase 10% of its shares outstanding. Should the company repurchase shares at the TTM pace through the next year, it would repurchase $2.4 billion of shares, which is 4.7% of the company's current market cap. When combined, the dividend and share repurchase yield could reach 9.0%. Strong Cash Flows Support Shareholder Return Investors should take comfort in knowing Suncor will be able to afford to pay its dividends and repurchase shares due to its large free cash flow (FCF) generation. From 2021 through 1Q25, Suncor generated $29.5 billion in FCF, which equals 46% of the company's enterprise value. Figure 5: Suncor's Cumulative Free Cash Flow: 2021 – 1Q25 Suncor Energy Free Cash Flow: 2021-1Q25 Suncor's $29.5 billion in FCF since 2021 is more than enough to cover its $17.5 billion in combined dividend payments ($7.7 billion) and share repurchases ($9.9 billion). Suncor's repurchases have also meaningfully reduced its shares outstanding from 1.4 billion in 2021 to 1.2 billion in 1Q25. See Figure 6. I like companies that choose to return capital to shareholders instead of spending it on costly acquisitions or executive bonuses that rarely drive shareholder value creation. In addition, reductions in shares outstanding tend to ensure capital appreciation for investors no matter how growth or momentum crazed the overall market it. In other words, companies that sport strong enough cash flows that enable them to consistently lower their shares outstanding offer excellent value. Figure 6: Suncor's Shares Outstanding: 2021 – 1Q25 Suncor Shares Outstanding 2021-1Q25 Strong Balance Sheet and Credit Rating to Weather Uncertainty Suncor has also leveraged its strong cash flow generation to improve its balance sheet. The company has decreased its total debt from $17.0 billion in 2020 to $10.2 billion in the TTM. Over the same time, cash and equivalents increased from $1.5 billion to $2.4 billion. Suncor earns an Attractive overall Credit Rating and scores an Attractive-or-better rating in four of the five credit rating metrics. See Figure 7. Even if economic conditions deteriorate, demand fluctuates, or oil prices fluctuate due to the war in the middle east, the company's strong financial footing secures its operations for the foreseeable future. Figure 7: Suncor's Credit Rating Details SU Credit Rating What's Not Working War Might Result in Further Price Volatility War drums in the middle east and around the world are knocking oil prices all over the place these days. Oil prices increased nearly 20% from the beginning of June through Friday June 20, largely due to fears that Iran could close the Strait of Hormuz, which accounts for ~20% of global oil and gas transportation. However, these worries have abated for now with the announcement of a ceasefire between both Isreal and Iran. Brent crude prices fell ~6% on Monday June 23 from Friday June 20 closing prices. Had Iran closed Hormuz in retaliation, oil prices were expected to surpass $100 per barrel, a stark increase from $75/barrel before the ceasefire announcement and ~$60/barrel at the beginning of June. The price volatility comes on the heels of falling oil prices for much of 2025. In mid-May, Brent crude prices were down over 25% from their early January highs. The plummeting price could be attributed to OPEC's decision to heavily increase production in May, June, and July of this year. The good news for Suncor investors is that the company has been lowering its crude oil breakeven price for years. In 2024, the company achieved a $7/barrel West Texas Intermediate (WTI) breakeven reduction, and its overall breakeven sits ~$45/barrel. Suncor even includes its dividend in its breakeven calculation to ensure it's able to return capital to shareholders throughout price cycles. Best of all, any potential further decline in oil prices is already more than priced into Suncor's current valuation, as I'll show below. Current Price Implies Profits Will Permanently Fall by 20% At its current price of $38/share, SU has a price-to-economic book value (PEBV) ratio of 0.8. This ratio means the market expects the company's NOPAT to permanently decline 20% from TTM levels. This expectation seems overly pessimistic considering Suncor has grown NOPAT by 5% compounded annually over the last five years and 2% compounded annually over the last ten years. Below, I use my reverse discounted cash flow (DCF) model to quantify the cash flow expectations for different stock price scenarios for SU. In the first scenario, I quantify the expectations baked into the current price. If I assume: then the stock would be worth $38/share today – or equal to the current stock price. In this scenario, Suncor's NOPAT would fall 1% through 2034, which is well below historical growth rates. Shares Could Go 30%+ Higher at Minimal Profit Growth If I instead assume Suncor's: SU would be worth at least $51/share today – a 34% upside to the current price. In this scenario, Suncor's NOPAT would grow 1% through 2034. Should SU grow profits more in line with historical levels, the stock has even more upside. Figure 8 compares Suncor's historical NOPAT to the NOPAT implied in each of the above DCF scenarios. Figure 8: Suncor's Historical and Implied NOPAT: DCF Valuation Scenarios SU DCF Implied NOPAT Scenarios
Globe and Mail
22-07-2025
- Business
- Globe and Mail
Suncor Energy to release second quarter 2025 financial results
Calgary, Alberta--(Newsfile Corp. - July 22, 2025) - Suncor Energy (TSX: SU) (NYSE: SU) will release its second quarter financial results on August 5, 2025 before 5:00 p.m. MT (7:00 p.m. ET). A webcast to review the second quarter will be held on August 6, 2025 at 7:30 a.m. MT (9:30 a.m. ET). Representing management will be Rich Kruger, President and Chief Executive Officer and Kris Smith, Chief Financial Officer. A question and answer period with analysts will follow brief remarks from management. Troy Little, Senior Vice President, External Affairs will host the call. To listen to the webcast please follow the instructions provided at The event will be archived for 90 days. Suncor Energy is Canada's leading integrated energy company. Suncor's operations include oil sands development, production and upgrading; offshore oil production; petroleum refining in Canada and the U.S.; and the company's Petro-Canada TM retail and wholesale distribution networks (including Canada's Electric Highway TM, a coast-to-coast network of fast-charging EV stations). Suncor is developing petroleum resources while advancing the transition to a lower-emissions future through investments in lower emissions intensity power, renewable feedstock fuels and projects targeting emissions intensity. Suncor also conducts energy trading activities focused primarily on the marketing and trading of crude oil, natural gas, byproducts, refined products and power. Suncor's common shares (symbol: SU) are listed on the Toronto and New York stock exchanges. For more information about Suncor, visit our website at
Yahoo
22-07-2025
- Business
- Yahoo
Suncor Energy to release second quarter 2025 financial results
Calgary, Alberta--(Newsfile Corp. - July 22, 2025) - Suncor Energy (TSX: SU) (NYSE: SU) will release its second quarter financial results on August 5, 2025 before 5:00 p.m. MT (7:00 p.m. ET). A webcast to review the second quarter will be held on August 6, 2025 at 7:30 a.m. MT (9:30 a.m. ET). Representing management will be Rich Kruger, President and Chief Executive Officer and Kris Smith, Chief Financial Officer. A question and answer period with analysts will follow brief remarks from management. Troy Little, Senior Vice President, External Affairs will host the call. To listen to the webcast please follow the instructions provided at The event will be archived for 90 days. Suncor Energy is Canada's leading integrated energy company. Suncor's operations include oil sands development, production and upgrading; offshore oil production; petroleum refining in Canada and the U.S.; and the company's Petro-CanadaTM retail and wholesale distribution networks (including Canada's Electric HighwayTM, a coast-to-coast network of fast-charging EV stations). Suncor is developing petroleum resources while advancing the transition to a lower-emissions future through investments in lower emissions intensity power, renewable feedstock fuels and projects targeting emissions intensity. Suncor also conducts energy trading activities focused primarily on the marketing and trading of crude oil, natural gas, byproducts, refined products and power. Suncor's common shares (symbol: SU) are listed on the Toronto and New York stock exchanges. For more information about Suncor, visit our website at Media inquiries: (833) 296-4570 media@ Investor inquiries: invest@ To view the source version of this press release, please visit
Yahoo
18-07-2025
- Business
- Yahoo
Scotiabank Raises PT on Suncor Energy (SU) to C$60 From C$57, Keeps Sector Perform Rating
Suncor Energy Inc. (NYSE:SU) is one of the best . On July 11, Scotiabank raised the firm's price target on Suncor Energy Inc. (NYSE:SU) to C$60 from C$57, keeping a Sector Perform rating on the shares. An offshore oil rig at night, illuminated by floodlights, with its shape silhouetted against the dark sky. The analyst told investors that the firm is updating its price targets on the E&P stocks it has in coverage, stating that it anticipates weak global oil prices to affect Canadian oil benchmarks in 2025 and 2026. Suncor Energy Inc. (NYSE:SU) is an integrated energy company that develops petroleum resource basins. Its operations are divided into the following segments: Oil Sands, Exploration and Production, Refining and Marketing, and Corporate and Eliminations. While we acknowledge the potential of SU as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
12-07-2025
- Business
- Yahoo
What Are Some Good Energy Stocks to Buy Now?
Written by Joey Frenette at The Motley Fool Canada Energy stocks can be quite volatile, especially if macro events send prices viciously in either direction. Undoubtedly, timing the price moves of various commodities can be incredibly hard to do. There are just too many variables to make it worth the while to predict what a specific commodity (especially oil, uranium, or anything else tied to energy) is going to do over the short- to medium-term. Heck, even the long-term forecast can be quite cloudy, given just how unpredictable the future can be. Black swans happen, and unless you've got some sort of crystal ball, you're going to need to be prepared to deal with them as they swim by. Like it or not, the magnitude of volatility facing the top energy plays isn't going anywhere. But for those who do have a strong stomach for high-beta volatility (higher beta entails more correlation to the TSX), I do think it's a smart move to be a net buyer of the highest-quality energy stocks during their moments of immense weakness. In this piece, we'll have a quick look at two names in the oil patch that have been reeling lately. Indeed, oil prices aren't skyrocketing. But they don't have to be for the following operationally-efficient players to do well and continue producing immense amounts of cash flow for reinvestment and distribution (in the form of dividends). Suncor Energy (TSX:SU) is a $66 billion relative value play in the Canadian energy patch. And while the longer-term chart (think the 10-year) may be less impressive than that of many of its peers (big and small), I do see serious value for those willing to buy and hold for at least the next five years. Indeed, getting paid a fat 4.5%-yielding dividend while you wait certainly makes the long-term hold that much easier! And if oil prices experience a sudden surge due to some unforeseen event, perhaps the dividend stands to grow at a rate that's slightly above what investors have come to expect. Either way, I'm a big fan of the value to be had from the name while it's going for just 11.2 times trailing price-to-earnings (P/E). That's too cheap for a misunderstood blue-chip stock that has what it takes to ride out periods when oil prices are on the lower end. Sure, Suncor goes for a hefty discount to its peers, but if long-term value is what you seek, I think it's time to stash the name on your radar. It's one of my top long-term value plays in the energy patch, and it's worth considering while its yield is well above 4%. Cenovus Energy (TSX:CVE) has had a terrible start to 2025, now down 11% year to date, putting the name around 35% away from its 2022 all-time highs. The $35.6 billion firm has a 4.3% dividend yield and a similar beta (1.27) to Suncor. And while the negative momentum has been tougher to get behind of late, I still think the name could be a great bounce-back option once oil prices get going again. For now, the company is in cost-cutting mode, even after posting some decent Q1 earnings to go with a nice dividend hike. All considered, CVE stock looks deeply undervalued at a 12.9 times trailing P/E. It's tough to tell how much room there is for the latest bounce off multi-year lows to run. Either way, newer investors should look to buy incrementally over time for the passive income and decent value proposition. The post What Are Some Good Energy Stocks to Buy Now? appeared first on The Motley Fool Canada. Before you buy stock in Cenovus Energy, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Cenovus Energy wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading 10 Stocks Every Canadian Should Own in 2025 [PREMIUM PICKS] Market Volatility Toolkit A Commonsense Cash Back Credit Card We Love Fool contributor Joey Frenette 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. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
