SUNCOR ENERGY INC (NYSE:SU) is probably undervalued for the fundamentals it is displaying.

Our stock screening tool has pinpointed SUNCOR ENERGY INC (NYSE:SU) as an undervalued stock. NYSE:SU maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Valuation Assessment of NYSE:SU

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:SU scores a 7 out of 10:

• A Price/Earnings ratio of 9.48 indicates a reasonable valuation of SU.
• 69.52% of the companies in the same industry are more expensive than SU, based on the Price/Earnings ratio.
• When comparing the Price/Earnings ratio of SU to the average of the S&P500 Index (29.35), we can say SU is valued rather cheaply.
• The Price/Forward Earnings ratio is 10.58, which indicates a very decent valuation of SU.
• Based on the Price/Forward Earnings ratio, SU is valued a bit cheaper than 65.71% of the companies in the same industry.
• SU is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.10, which is the current average of the S&P500 Index.
• Based on the Enterprise Value to EBITDA ratio, SU is valued a bit cheaper than the industry average as 70.48% of the companies are valued more expensively.
• SU's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SU is cheaper than 80.95% of the companies in the same industry.
• SU has a very decent profitability rating, which may justify a higher PE ratio.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:SU has earned a 6 out of 10:

• Looking at the Return On Assets, with a value of 8.84%, SU is in the better half of the industry, outperforming 74.76% of the companies in the same industry.
• SU has a Return On Equity of 17.79%. This is in the better half of the industry: SU outperforms 69.52% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 8.70%, SU is in the better half of the industry, outperforming 63.33% of the companies in the same industry.
• SU has a Profit Margin of 15.73%. This is in the better half of the industry: SU outperforms 60.48% of its industry peers.
• In the last couple of years the Profit Margin of SU has grown nicely.
• SU has a Gross Margin of 61.96%. This is in the better half of the industry: SU outperforms 68.57% of its industry peers.

Health Assessment of NYSE:SU

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:SU, the assigned 7 for health provides valuable insights:

• SU has a better Altman-Z score (2.13) than 69.05% of its industry peers.
• SU has a debt to FCF ratio of 1.72. This is a very positive value and a sign of high solvency as it would only need 1.72 years to pay back of all of its debts.
• The Debt to FCF ratio of SU (1.72) is better than 82.38% of its industry peers.
• SU has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
• SU has a better Current ratio (1.59) than 66.19% of its industry peers.

Analyzing Growth Metrics

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:SU has achieved a 4 out of 10:

• The Earnings Per Share has been growing by 13.99% on average over the past years. This is quite good.
• The Earnings Per Share is expected to grow by 21.25% on average over the next years. This is a very strong growth
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of SU for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.