SUNCOR ENERGY INC (SU.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:SU - CA8672241079 - Common Stock
70.58 CAD
+0.97 (+1.39%)
Taking everything into account, SU scores 7 out of 10 in our fundamental rating. SU was compared to 206 industry peers in the Oil, Gas & Consumable Fuels industry. SU scores excellent points on both the profitability and health parts. This is a solid base for a good stock. SU has a valuation in line with the averages, but on the other hand it scores bad on growth.
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
- Looking at the Return On Assets, with a value of 5.88%, SU belongs to the top of the industry, outperforming 87.86% of the companies in the same industry.
- SU has a Return On Equity of 11.65%. This is amongst the best in the industry. SU outperforms 83.50% of its industry peers.
- The Return On Invested Capital of SU (7.63%) is better than 90.78% of its industry peers.
- SU had an Average Return On Invested Capital over the past 3 years of 10.38%. This is above the industry average of 6.62%.
| 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 better Profit Margin (10.65%) than 74.27% of its industry peers.
- SU's Profit Margin has improved in the last couple of years.
- SU has a better Operating Margin (16.10%) than 64.08% 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 80.58% 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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SU is still 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.
- Compared to 1 year ago, SU has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.39 indicates that SU is not a great score, but indicates only limited risk for bankruptcy at the moment.
- The Altman-Z score of SU (2.39) is better than 72.82% 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.
- SU has a Debt to FCF ratio of 1.80. This is amongst the best in the industry. SU outperforms 88.35% 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 62.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.8 | ||
| Altman-Z | 2.39 |
ROIC/WACC0.99
WACC7.73%
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.
- With a decent Current ratio value of 1.35, SU is doing good in the industry, outperforming 70.39% of the companies in the same industry.
- A Quick Ratio of 0.85 indicates that SU may have some problems paying its short term obligations.
- SU's Quick ratio of 0.85 is fine compared to the rest of the industry. SU outperforms 60.19% of its industry peers.
- SU does not score too well on the current and quick ratio evaluation. However, as it has 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.
- SU shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.08% yearly.
- 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
- Based on estimates for the next years, SU will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.16% on average per year.
- The Revenue is expected to decrease by -0.17% on average over the next years.
EPS Next Y-13.47%
EPS Next 2Y-15.31%
EPS Next 3Y-8%
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
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
- SU is valuated correctly with a Price/Earnings ratio of 14.86.
- Compared to the rest of the industry, the Price/Earnings ratio of SU indicates a somewhat cheap valuation: SU is cheaper than 68.45% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of SU to the average of the S&P500 Index (28.87), we can say SU is valued slightly cheaper.
- SU is valuated rather expensively with a Price/Forward Earnings ratio of 18.19.
- SU's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SU is cheaper than 62.14% of the companies in the same industry.
- SU is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.96, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.86 | ||
| Fwd PE | 18.19 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, SU is valued cheaper than 83.98% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, SU is valued cheaper than 85.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.55 | ||
| EV/EBITDA | 6.42 |
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 -8.00% in the coming years.
PEG (NY)N/A
PEG (5Y)1.06
EPS Next 2Y-15.31%
EPS Next 3Y-8%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.49%, SU has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 3.29, SU pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, 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
- 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-15.31%
EPS Next 3Y-8%
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.