Best Dividend Stocks. Analyze the stocks with the best dividend, while also showing decent profitability and health.


SUNCOR ENERGY INC

Toronto Stock Exchange / Energy / Oil, Gas & Consumable Fuels

Fundamental Rating

6

SU gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 222 industry peers in the Oil, Gas & Consumable Fuels industry. SU scores excellent on profitability, but there are some minor concerns on its financial health. SU is valued correctly, but it does not seem to be growing. Finally SU also has an excellent dividend rating. These ratings would make SU suitable for dividend investing!



7

1. Profitability

1.1 Basic Checks

SU had positive earnings in the past year.
SU had a positive operating cash flow in the past year.
SU had positive earnings in 4 of the past 5 years.
Each year in the past 5 years SU had a positive operating cash flow.

1.2 Ratios

With an excellent Return On Assets value of 9.37%, SU belongs to the best of the industry, outperforming 88.37% of the companies in the same industry.
Looking at the Return On Equity, with a value of 19.17%, SU belongs to the top of the industry, outperforming 89.77% of the companies in the same industry.
SU's Return On Invested Capital of 8.30% is amongst the best of the industry. SU outperforms 81.86% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SU is in line with the industry average of 8.08%.
Industry RankSector Rank
ROA 9.37%
ROE 19.17%
ROIC 8.3%
ROA(3y)8.34%
ROA(5y)4.63%
ROE(3y)17.82%
ROE(5y)9.66%
ROIC(3y)9.58%
ROIC(5y)N/A

1.3 Margins

SU's Profit Margin of 16.90% is fine compared to the rest of the industry. SU outperforms 71.16% of its industry peers.
In the last couple of years the Profit Margin of SU has grown nicely.
SU has a Operating Margin of 17.68%. This is comparable to the rest of the industry: SU outperforms 57.67% of its industry peers.
SU's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 62.90%, SU is in the better half of the industry, outperforming 74.88% of the companies in the same industry.
In the last couple of years the Gross Margin of SU has remained more or less at the same level.
Industry RankSector Rank
OM 17.68%
PM (TTM) 16.9%
GM 62.9%
OM growth 3YN/A
OM growth 5Y1.29%
PM growth 3YN/A
PM growth 5Y14.61%
GM growth 3Y-0.08%
GM growth 5Y-0.14%

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6

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SU is creating some value.
SU has less shares outstanding than it did 1 year ago.
SU has less shares outstanding than it did 5 years ago.
SU has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 2.17 indicates that SU is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of SU (2.17) is better than 67.44% of its industry peers.
The Debt to FCF ratio of SU is 2.40, which is a good value as it means it would take SU, 2.40 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of SU (2.40) is better than 84.19% of its industry peers.
SU has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
SU has a Debt to Equity ratio (0.35) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.35
Debt/FCF 2.4
Altman-Z 2.17
ROIC/WACC1.12
WACC7.4%

2.3 Liquidity

A Current Ratio of 1.44 indicates that SU should not have too much problems paying its short term obligations.
SU has a Current ratio of 1.44. This is in the better half of the industry: SU outperforms 66.05% of its industry peers.
SU has a Quick Ratio of 1.44. This is a bad value and indicates that SU is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.88, SU is in line with its industry, outperforming 54.42% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.44
Quick Ratio 0.88

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2

3. Growth

3.1 Past

SU shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -38.70%.
SU shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.99% yearly.
The Revenue for SU has decreased by -15.85% in the past year. This is quite bad
Measured over the past years, SU shows a small growth in Revenue. The Revenue has been growing by 4.96% on average per year.
EPS 1Y (TTM)-38.7%
EPS 3YN/A
EPS 5Y13.99%
EPS growth Q2Q-30.39%
Revenue 1Y (TTM)-15.85%
Revenue growth 3Y25.79%
Revenue growth 5Y4.96%
Revenue growth Q2Q-7.97%

3.2 Future

SU is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.52% yearly.
SU is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -2.58% yearly.
EPS Next Y0.56%
EPS Next 2Y2.94%
EPS Next 3Y3.65%
EPS Next 5Y9.52%
Revenue Next Year3.18%
Revenue Next 2Y-0.3%
Revenue Next 3Y-2.58%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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6

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 10.56, the valuation of SU can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of SU indicates a somewhat cheap valuation: SU is cheaper than 61.86% of the companies listed in the same industry.
SU is valuated cheaply when we compare the Price/Earnings ratio to 24.84, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 10.50, the valuation of SU can be described as reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as SU.
SU's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.35.
Industry RankSector Rank
PE 10.56
Fwd PE 10.5

4.2 Price Multiples

75.35% of the companies in the same industry are more expensive than SU, based on the Enterprise Value to EBITDA ratio.
SU's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SU is cheaper than 71.63% of the companies in the same industry.
Industry RankSector Rank
P/FCF 10.82
EV/EBITDA 5.46

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SU has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)18.7
PEG (5Y)0.76
EPS Next 2Y2.94%
EPS Next 3Y3.65%

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8

5. Dividend

5.1 Amount

SU has a Yearly Dividend Yield of 4.05%, which is a nice return.
SU's Dividend Yield is a higher than the industry average which is at 8.84.
Compared to an average S&P500 Dividend Yield of 2.41, SU pays a better dividend.
Industry RankSector Rank
Dividend Yield 4.05%

5.2 History

On average, the dividend of SU grows each year by 7.66%, which is quite nice.
SU has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of SU decreased in the last 3 years.
Dividend Growth(5Y)7.66%
Div Incr Years2
Div Non Decr Years2

5.3 Sustainability

33.14% of the earnings are spent on dividend by SU. This is a low number and sustainable payout ratio.
The dividend of SU is growing, but earnings are growing more, so the dividend growth is sustainable.
DP33.14%
EPS Next 2Y2.94%
EPS Next 3Y3.65%

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