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Summary
- The S&P/TSX energy index is down over 53 per cent this year amid the oil price volatility and low demand.
- Canadian Natural Resources has dethroned Suncor Energy as Canada’s most valuable energy company.
- The upcoming US presidential elections may have a substantial impact on the global oil and gas prices and, in turn, the Canadian energy sector.
Shares of Suncor Energy (TSX:SU) and Canadian Natural Resources (TSX:CNQ) currently rank high among trending stocks on the Toronto Stock Exchange. These two Canadian energy companies have been in demand among investors for quite a while, despite the oil and gas sector suffering a great deal amid the pandemic.
Beaten from all sides by the COVID-19 outbreak, the energy sector has had a dwindling performance on the stock markets this year. As the fourth-largest oil producer in the world, Canada did not escape this crisis. The S&P/TSX Capped Energy lost over 53 per cent year-to-date, with the demand for oil plunging globally through the pandemic.
The energy index, however, saw a jump after oil prices rose on October 5. The spike in oil prices came after doctors who were treating then-hospitalized US President Donald Trump for COVID-19 hinted at the possibility of an early discharge. The West Texas Intermediate rose over US$ 41 on October 8.
The upcoming US presidential elections may have a substantial impact on the global oil and gas prices and, in turn, the Canadian energy sector. Democratic presidential candidate Joe Biden, who is currently leading in the polls, has voiced his support for clean energy alternatives. He has even hinted at delaying the Alberta government-supported Keystone XL pipeline project, which has time and again raised concerns among environment activists. Trump, on the other hand, has not shown keen interest in environment-related issues. In fact, one of his first steps after winning the 2016 presidential elections was to overturn Obama’s decision and revive Keystone XL pipeline project in January 2017.
With all that in mind, let’s turn our attention back to the currently trending stocks of Suncor Energy and Canadian Natural Resources and their recent performances.
Canadian Natural Resources Limited (TSX:CNQ)
Current CNQ Stock Price: C$ 23.43
Having surpassed Suncor as the country’s most valuable energy company earlier in October, Canadian Natural Resources currently hold a market cap of C$ 27.6 billion. Back in August, it announced a quarterly dividend of C$ 0.425 which currently has a dividend yield of 7.25 per cent.
Earlier in October, Canadian Natural Resources completed its acquisition of British Columbia-based oil firm Painted Pony Energy. Following this deal, Painted Pony was taken off from the TSX on October 7.
CNQ STOCK PERFORMANCE
Shares of Canadian Natural Resources lost 43 per cent in value this year but have recovered over 25 per cent in the last six months. Its scrips climbed nearly 14 per cent in October.
CNQ stock tumbled to C$ 11 on March 18 amid the pandemic-led market crash, its lowest level so far this year. Since then, it has surged nearly 113 per cent in the following seven months.
It currently has a 10-day average share trading volume of 6.3 million.
CNQ FINANCIAL RESULTS
Canadian Natural Resources’ total revenue of C$ 2.8 billion in the second quarter ending 30 June 2020 was a substantial drop from C$ 5.5 billion-revenue in Q2 2019.
The company also bore a net loss of C$ 310 million in Q2 2020, as compared to a net profit of C$2.8 billion in Q2 2019. As of June 2020, it had a liquidity of C$ 4.1 billion.
Suncor Energy Inc (TSX:SU)
Current SU Stock Price: C$ 16.49
Suncor Energy Inc has suffered major financial and operational setbacks due to the pandemic. Forced to take long-term cost control measures, the company recently announced plans to cut down its workforce by 10 to 15 per cent over the next few years. Currently about 13,000-employees strong, the workforce reduction is likely to impact some 2,000 non-union jobs.
Suncor also faced the heat of securities fraud charges in September and was put under investigation for it.
SU STOCK PERFOMANCE
Suncor Energy stock declined over 61 per cent this year. It registered a drop of 27 per cent in the last six months and over 25 per cent in three months.
However, since dipping to C$ 15.07 amid the March lows, its scrips climbed about nine per cent in seven months’ time.
SU FINANCIAL RESULTS
Suncor Energy saw its debt climb to C$ 21 billion in its second quarter ending 30 June 2020. Its net loss stood at C$ 614 million, while its funds from operations dropped to C$ 488 million in Q2 2020.
(Source: Suncor Energy /Image Credit: ©Kalkine Group)
Its cash and cash equivalents were C$ 1.8 billion as of June 2020.
The energy company snipped its quarterly dividends to C$ 0.21 in the second quarter of 2020. It currently has a dividend yield of 5.09 per cent, as per data on the TSX.
Suncor Energy is set to release its third quarter results for 2020 on October 28.
