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 15-19%
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 2007-2009 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
and the North Sea ,
(2) significant
long lived reserves,
(3) improving
operating efficiencies and cost savings initiatives.
Negatives:
(1) exposure to
fluctuations in oil and gas prices,
(2) a steep drop
in crude oil prices would render its high cost oil sands production
unprofitable,
(3)
potential environmental and regulatory problems.
Suncor is rated
A by Value Line, has a 20% debt to equity ratio and its stock pays a 2.5%
yield.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2003
SU 2.5% 13% 30% 9
Debt/ EPS Down Net Value Line
Equity ROE Since 2003 Margin Rating
SU 20% 10% 3 9% A
Chart
Note:
SU stock made decent initial progress off its November 2008 low, surpassing the
downtrend off its May 2008 high (red line) and the November 2008 trading high
(green line). It quickly transitioned
into a long term trading range (straight blue lines). Intermediate term it is also in a trading
range (purple lines). Short term, the
trend is up (brown line). The wiggly
blue line is on balance volume. The
Aggressive Growth Portfolio owns a 75% position in SU. The upper boundary of its Buy
Value Range Sell
Half Range
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