SUNCOR ENERGY INC (SU.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:SU - CA8672241079 - Common Stock
69.61 CAD
+0.89 (+1.3%)
Overall SU gets a fundamental rating of 7 out of 10. We evaluated SU against 214 industry peers in the Oil, Gas & Consumable Fuels industry. SU has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. SU has a valuation in line with the averages, 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.
- SU's Return On Equity of 11.65% is amongst the best of the industry. SU outperforms 83.64% of its industry peers.
- With an excellent Return On Invested Capital value of 7.63%, SU belongs to the best of the industry, outperforming 91.12% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital 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 has a Profit Margin of 10.65%. This is in the better half of the industry: SU outperforms 74.77% of its industry peers.
- In the last couple of years the Profit Margin of SU has grown nicely.
- SU's Operating Margin of 16.10% is fine compared to the rest of the industry. SU outperforms 64.49% of its industry peers.
- In the last couple of years the Operating Margin of SU has grown nicely.
- Looking at the Gross Margin, with a value of 62.21%, SU belongs to the top of the industry, outperforming 80.37% of the companies in the same industry.
- SU's Gross Margin has declined in the last couple of years.
| 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SU is creating some value.
- Compared to 1 year ago, SU has less shares outstanding
- SU has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, SU has an improved debt to assets ratio.
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.
- The Altman-Z score of SU (2.37) is better than 72.90% of its industry peers.
- The Debt to FCF ratio of SU is 1.80, which is an excellent value as it means it would take SU, only 1.80 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of SU (1.80) is better than 88.78% of its industry peers.
- SU has a Debt/Equity ratio of 0.27. This is a healthy value indicating a solid balance between debt and equity.
- SU's Debt to Equity ratio of 0.27 is fine compared to the rest of the industry. SU outperforms 63.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.8 | ||
| Altman-Z | 2.37 |
ROIC/WACC1.01
WACC7.56%
2.3 Liquidity
- SU has a Current Ratio of 1.35. 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 Current ratio of 1.35. This is in the better half of the industry: SU outperforms 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.
- Looking at the Quick ratio, with a value of 0.85, SU is in the better half of the industry, outperforming 61.22% of the companies in the same industry.
- 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
- The earnings per share for SU have decreased strongly by -12.36% in the last year.
- 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%.
- The Revenue has been growing slightly by 5.74% on average over the past years.
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.
- Based on estimates for the next years, SU will show a decrease in Revenue. The Revenue will decrease by -0.17% on average per year.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 14.65, SU is valued correctly.
- 68.69% of the companies in the same industry are more expensive than SU, based on the Price/Earnings ratio.
- SU's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- SU is valuated rather expensively with a Price/Forward Earnings ratio of 18.10.
- 60.28% of the companies in the same industry are more expensive than SU, based on the Price/Forward Earnings ratio.
- SU is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 18.1 |
4.2 Price Multiples
- SU's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. SU is cheaper than 85.51% of the companies in the same industry.
- 85.98% of the companies in the same industry are more expensive than SU, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.41 | ||
| EV/EBITDA | 6.31 |
4.3 Compensation for Growth
- SU has an outstanding profitability rating, which may justify a higher PE ratio.
- A cheap valuation may be justified as SU's earnings are expected to decrease with -2.74% in the coming years.
PEG (NY)N/A
PEG (5Y)1.04
EPS Next 2Y-15.68%
EPS Next 3Y-2.74%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.49%, SU has a reasonable but not impressive dividend return.
- SU's Dividend Yield is a higher than the industry average which is at 2.82.
- SU's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| 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
- 53.29% of the earnings are spent on dividend by SU. 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.