Whichever direction the Canadian government’s policies sway, Suncor Energy’s (TSX:SU) investors may find themselves largely immune in the long run. Its vast energy portfolio, with a focus on increasing green energy operations, comes to the rescue of the oil and gas sector investors.
While the focus on renewable energy will multiply going forward, experts believe that revenues from oil and gas sector is not likely to evaporate as of now.
Let us now analyze Suncor stock’s fundamentals and growth potential:
Suncor Energy Inc. (TSX:SU)
Despite a pandemic that ravaged the Canadian economy, this energy sector stock has remained resilient to most headwinds with an ability to bounce back.
The stock grew nearly 18 per cent in the last one year, touching its 52-week high at C$ 29.55. The scrip’s last close on Tuesday, May 25, was at C$ 27.89.
With an average daily volume for a 30-day period at 6.7 million, it also one of the most highly traded stocks on the Toronto Stock Exchange.
The energy stock can be viewed as a promising investment option, seeing its well-integrated business model. Its operations include oil sands production, downstream oil exploration and production activities, and oil refining. The company also has some investments in renewable wind energy and biofuel, among others.
Apart from its integrated business model, Suncor’s ability to upscale and adapt with changing trends in the energy sector are some key upsides for the stock, which may fetch healthy dividends for its investors in the longer run, according to industry experts.
Suncor distributes quarterly dividend and currently yields 3.012 per cent. The last dividend payout was announced at 21 cents, payable in June 2021.
The company is expected to benefit from rising oil prices as the world economy prepares to step out of the pandemic and recover to its pre-COVID production capacity. This pickup in production activity, and a subsequent rise in oil prices places Suncor at the core of this post-pandemic growth.
The oil and gas sector player reported robust earnings in the quarter ended March 2021 on the back of improved production volumes, lower operational costs, and rising oil prices.
Suncor reported net income of C$ 821 million in the first quarter of 2021, against a net loss of C$ 3.5 billion in the corresponding period last year.
Its revenue from operations rose to C$ 2.1 billion as against C$ 1 billion in the year-ago period. The company’s net cash flow also rose to C$ 2.3 billion from C$ 1.4 billion in the first quarter of 2020.
The company has a market capitalization of C$ 42.2 billion, and a price-to-earnings ratio of 1,394.50.
Its debt-to-equity (D/E) ratio, which reflects the company’s current leverage status, currently stands at 0.57.
Please note: The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from Refinitiv.