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 206 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
- In the past year SU was profitable.
- In the past year SU had a positive cash flow from operations.
- 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
- 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.
- SU has a better Return On Invested Capital (7.63%) than 90.78% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for SU 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.
- In the last couple of years the Profit Margin of SU has grown nicely.
- 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.
- SU's Gross Margin of 62.21% is amongst the best of the industry. SU outperforms 80.58% of its industry peers.
- 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
- 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.
- SU has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for SU has been reduced compared to a year ago.
2.2 Solvency
- SU has an Altman-Z score of 2.39. 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.
- With a decent Altman-Z score value of 2.39, SU is doing good in the industry, outperforming 72.33% of the companies in the same industry.
- 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 88.35% of its industry peers.
- A Debt/Equity ratio of 0.27 indicates that SU is not too dependend on debt financing.
- SU has a Debt to Equity ratio of 0.27. This is in the better half of the industry: SU outperforms 62.14% of its industry peers.
| 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.
- Looking at the Current ratio, with a value of 1.35, SU is in the better half of 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 has a better Quick ratio (0.85) than 60.19% 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
- 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.
- Looking at the last year, SU shows a decrease in Revenue. The Revenue has decreased by -3.08% in the last year.
- 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.
- 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-15.31%
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
- The Price/Earnings ratio is 14.65, which indicates a correct valuation of SU.
- 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.
- The average S&P500 Price/Earnings ratio is at 27.21. SU is valued slightly cheaper when compared to this.
- Based on the Price/Forward Earnings ratio of 17.94, the valuation of SU can be described as rather expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of SU indicates a somewhat cheap valuation: SU is cheaper than 62.62% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, SU is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.65 | ||
| Fwd PE | 17.94 |
4.2 Price Multiples
- 84.95% of the companies in the same industry are more expensive than SU, based on the Enterprise Value to EBITDA ratio.
- SU's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SU is cheaper than 85.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.41 | ||
| EV/EBITDA | 6.38 |
4.3 Compensation for Growth
- SU has an outstanding profitability rating, which may justify a higher PE ratio.
- SU's earnings are expected to decrease with -8.00% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.04
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.
- SU's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| 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 been paying a dividend for at least 10 years, so it has 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.
- The dividend of SU is growing, but earnings are growing more, so the dividend growth is 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 6 / 10 to SU.CA.
Can you provide the valuation status for SUNCOR ENERGY INC?
ChartMill assigns a valuation rating of 5 / 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 7 / 10.
What is the financial health of SUNCOR ENERGY INC (SU.CA) stock?
The financial health rating of SUNCOR ENERGY INC (SU.CA) is 7 / 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.