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

We assign a fundamental rating of 6 out of 10 to SU. SU was compared to 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 has a valuation in line with the averages, but it does not seem to be growing. Finally SU also has an excellent dividend rating. With these ratings, SU could be worth investigating further for dividend investing!.



7

1. Profitability

1.1 Basic Checks

In the past year SU was profitable.
SU had a positive operating cash flow in the past year.
SU had positive earnings in 4 of the past 5 years.
SU had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

SU's Return On Assets of 9.37% is amongst the best of the industry. SU outperforms 88.26% of its industry peers.
SU's Return On Equity of 19.17% is amongst the best of the industry. SU outperforms 89.67% of its industry peers.
SU has a Return On Invested Capital of 8.30%. This is amongst the best in the industry. SU outperforms 81.69% 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 has a better Profit Margin (16.90%) than 71.36% 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 58.22% of its industry peers.
In the last couple of years the Operating Margin of SU has remained more or less at the same level.
The Gross Margin of SU (62.90%) is better than 74.65% of its industry peers.
SU's Gross Margin has been stable in the last couple of years.
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.
The number of shares outstanding for SU has been reduced compared to 1 year ago.
Compared to 5 years ago, SU has less shares outstanding
The debt/assets ratio for SU has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.14 indicates that SU is not a great score, but indicates only limited risk for bankruptcy at the moment.
SU has a Altman-Z score of 2.14. This is in the better half of the industry: SU outperforms 67.61% of its industry peers.
SU has a debt to FCF ratio of 2.40. This is a good value and a sign of high solvency as SU would need 2.40 years to pay back of all of its debts.
SU has a better Debt to FCF ratio (2.40) than 84.51% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that SU is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.35, SU perfoms like the industry average, outperforming 43.19% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.35
Debt/FCF 2.4
Altman-Z 2.14
ROIC/WACC1.13
WACC7.38%

2.3 Liquidity

SU has a Current Ratio of 1.44. This is a normal value and indicates that SU is financially healthy and should not expect problems in meeting its short term obligations.
SU has a better Current ratio (1.44) than 67.14% of its industry peers.
A Quick Ratio of 0.88 indicates that SU may have some problems paying its short term obligations.
SU has a Quick ratio (0.88) which is comparable to the rest of the 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%.
Measured over the past years, SU shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.99% on average per year.
Looking at the last year, SU shows a very negative growth in Revenue. The Revenue has decreased by -15.85% in the last year.
The Revenue has been growing slightly by 4.96% on average over the past years.
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

The Price/Earnings ratio is 10.25, which indicates a very decent valuation of SU.
SU's Price/Earnings ratio is a bit cheaper when compared to the industry. SU is cheaper than 62.44% of the companies in the same industry.
SU's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.28.
SU is valuated reasonably with a Price/Forward Earnings ratio of 10.19.
SU's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.88, SU is valued rather cheaply.
Industry RankSector Rank
PE 10.25
Fwd PE 10.19

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SU is valued a bit cheaper than the industry average as 75.59% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, SU is valued a bit cheaper than the industry average as 73.24% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 10.5
EV/EBITDA 5.32

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SU does not grow enough to justify the current Price/Earnings ratio.
SU has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)18.14
PEG (5Y)0.73
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 4.19%, which is a nice return.
SU's Dividend Yield is a higher than the industry average which is at 8.89.
SU's Dividend Yield is rather good when compared to the S&P500 average which is at 2.41.
Industry RankSector Rank
Dividend Yield 4.19%

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

SU pays out 33.14% of its income as dividend. This is a sustainable payout ratio.
SU's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP33.14%
EPS Next 2Y2.94%
EPS Next 3Y3.65%

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