SUNCOR ENERGY INC (SU.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:SU - CA8672241079 - Common Stock
69.61 CAD
+0.89 (+1.3%)
We assign a fundamental rating of 7 out of 10 to SU. SU was compared to 214 industry peers in the Oil, Gas & Consumable Fuels industry. Both the health and profitability get an excellent rating, making SU a very profitable company, without any liquidiy or solvency issues. SU is valued correctly, but it does not seem to be growing.
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.
- Of the past 5 years SU 4 years were profitable.
- Each year in the past 5 years SU had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of SU (5.88%) is better than 88.32% of its industry peers.
- The Return On Equity of SU (11.65%) is better than 83.64% of its industry peers.
- SU's Return On Invested Capital of 7.63% is amongst the best of the industry. SU outperforms 91.12% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for SU is above the industry average of 6.53%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.88% | ||
| ROE | 11.65% | ||
| ROIC | 7.63% |
ROA(3y)8.93%
ROA(5y)5.32%
ROE(3y)18.58%
ROE(5y)10.98%
ROIC(3y)10.38%
ROIC(5y)N/A
1.3 Margins
- SU's Profit Margin of 10.65% is fine compared to the rest of the industry. SU outperforms 74.77% of its industry peers.
- SU's Profit Margin has improved in the last couple of years.
- The Operating Margin of SU (16.10%) is better than 64.49% of its industry peers.
- In the last couple of years the Operating Margin of SU has grown nicely.
- SU has a better Gross Margin (62.21%) than 80.37% of its industry peers.
- In the last couple of years the Gross Margin of SU has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.1% | ||
| PM (TTM) | 10.65% | ||
| GM | 62.21% |
OM growth 3Y4.42%
OM growth 5Y1.85%
PM growth 3Y4.08%
PM growth 5Y9.44%
GM growth 3Y-1.29%
GM growth 5Y-1.52%
2. Health
2.1 Basic Checks
- SU has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- SU has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for SU has been reduced compared to 5 years ago.
- SU has a better debt/assets ratio than last year.
2.2 Solvency
- SU has an Altman-Z score of 2.37. This is not the best score and indicates that SU is in the grey zone with still only limited risk for bankruptcy at the moment.
- SU's Altman-Z score of 2.37 is fine compared to the rest of the industry. SU outperforms 72.90% of its industry peers.
- SU has a debt to FCF ratio of 1.80. This is a very positive value and a sign of high solvency as it would only need 1.80 years to pay back of all of its debts.
- The Debt to FCF ratio of SU (1.80) is better than 88.78% of its industry peers.
- A Debt/Equity ratio of 0.27 indicates that SU is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.27, SU is in the better half of the industry, outperforming 63.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.8 | ||
| Altman-Z | 2.37 |
ROIC/WACC1.01
WACC7.56%
2.3 Liquidity
- A Current Ratio of 1.35 indicates that SU should not have too much problems paying its short term obligations.
- SU has a better Current ratio (1.35) than 71.03% of its industry peers.
- SU has a Quick Ratio of 1.35. This is a bad value and indicates that SU is not financially healthy enough and could expect problems in meeting its short term obligations.
- SU's Quick ratio of 0.85 is fine compared to the rest of the industry. SU outperforms 61.22% of its industry peers.
- The current and quick ratio evaluation for SU is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
- SU shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -12.36%.
- The Earnings Per Share has been growing by 14.08% on average over the past years. This is quite good.
- SU shows a decrease in Revenue. In the last year, the revenue decreased by -3.08%.
- SU shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.74% yearly.
EPS 1Y (TTM)-12.36%
EPS 3Y28.33%
EPS 5Y14.08%
EPS Q2Q%0%
Revenue 1Y (TTM)-3.08%
Revenue growth 3Y9.01%
Revenue growth 5Y5.74%
Sales Q2Q%-3.9%
3.2 Future
- The Earnings Per Share is expected to grow by 11.16% on average over the next years. This is quite good.
- SU is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.17% yearly.
EPS Next Y-13.47%
EPS Next 2Y-15.68%
EPS Next 3Y-2.74%
EPS Next 5Y11.16%
Revenue Next Year-0.3%
Revenue Next 2Y-3%
Revenue Next 3Y-1.99%
Revenue Next 5Y-0.17%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 14.65 indicates a correct valuation of SU.
- SU's Price/Earnings ratio is a bit cheaper when compared to the industry. SU is cheaper than 68.69% of the companies in the same industry.
- SU is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 18.10, which indicates a rather expensive current valuation of SU.
- 60.28% of the companies in the same industry are more expensive than SU, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of SU to the average of the S&P500 Index (24.26), we can say SU is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 18.1 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SU indicates a rather cheap valuation: SU is cheaper than 85.51% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of SU indicates a rather cheap valuation: SU is cheaper than 85.98% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.41 | ||
| EV/EBITDA | 6.31 |
4.3 Compensation for Growth
- The excellent profitability rating of SU may justify a higher PE ratio.
- SU's earnings are expected to decrease with -2.74% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.04
EPS Next 2Y-15.68%
EPS Next 3Y-2.74%
5. Dividend
5.1 Amount
- SU has a Yearly Dividend Yield of 3.49%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.82, SU pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.81, SU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.49% |
5.2 History
- The dividend of SU has a limited annual growth rate of 5.68%.
- SU has paid a dividend for at least 10 years, which is a reliable track record.
- SU has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.68%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
- SU pays out 53.29% of its income as dividend. This is a bit on the high side, but may be sustainable.
- SU's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP53.29%
EPS Next 2Y-15.68%
EPS Next 3Y-2.74%
SUNCOR ENERGY INC / SU.CA FAQ
What is the ChartMill fundamental rating of SUNCOR ENERGY INC (SU.CA) stock?
ChartMill assigns a fundamental rating of 7 / 10 to SU.CA.
Can you provide the valuation status for SUNCOR ENERGY INC?
ChartMill assigns a valuation rating of 6 / 10 to SUNCOR ENERGY INC (SU.CA). This can be considered as Fairly Valued.
How profitable is SUNCOR ENERGY INC (SU.CA) stock?
SUNCOR ENERGY INC (SU.CA) has a profitability rating of 8 / 10.
What is the financial health of SUNCOR ENERGY INC (SU.CA) stock?
The financial health rating of SUNCOR ENERGY INC (SU.CA) is 8 / 10.
Can you provide the expected EPS growth for SU stock?
The Earnings per Share (EPS) of SUNCOR ENERGY INC (SU.CA) is expected to decline by -13.47% in the next year.