Suncor Energy
explores, acquires, develops, produces and markets crude oil and natural gas from (Canadian) oil sands,
refines crude oil and markets petroleum and petroleum products. SU has grown profits and dividends at a 16-17%
rate over the past ten years. The
company’s return on equity varied dramatically ranging from 4% to 24%. SU experienced a fall off in profits during
the recent economic down turn but has witnessed a return to above average
growth as a result of :
(1) rising
production as a result of the merger with Petro-Canada as well as significant
reserves in offshore Canada North Sea ,
(2) share buy
back program,
(3) improving
operating efficiencies and cost savings initiatives.
Negatives:
(1) exposure to
fluctuations in oil and gas prices,
(2) operations
adversely impacted by suspension of activity in Syria
(3) a steep drop
in crude oil prices would render its high cost oil sands production
unprofitable,
Suncor is rated
A by Value Line, has a 21% debt to equity ratio and its stock pays a 1.7%
yield.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2002
SU 1.7% 11% 17% 9
Debt/ EPS Down Net Value Line
Equity ROE Since 2002 Margin Rating
SU 21%
11% 2 11% A
Chart
Note:
SU made progress off its November 2008 low, surpassing the downtrend off its
May 2008 high (straight red line) and the November 2008 trading high (green
line). Long term the stock is in a
trading range (blue lines). Intermediate
term, it is in a trading range (purple line is lower boundary; top blue line is
upper boundary). Short term, SU recently
broke out of a pennant formation to the upside---a technical positive for the
stock. The wiggly red line is the 50 day
moving average. The Aggressive Growth
Portfolio owns a 75% position in SU. The
upper boundary of its Buy Value
Range Sell Half
Range
11/12
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