Suncor Energy Inc (NYSE: SU)

Sector: Energy Industry: Oil & Gas Integrated CIK: 0000311337
Market Cap 67.22 Bn
P/B 2.04
P/E 15.56
P/S 1.87
ROIC (Qtr) 15.31
Div Yield % 1.47
Rev 1y % (Qtr) 3.37
Total Debt (Qtr) 10.59 Bn
Debt/Equity (Qtr) 0.32
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About

Investment thesis

Bull case

  • Strong operating cash flow of 9.33B provides robust 0.88x coverage of total debt 10.59B, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.66B provide 2.27x coverage of short-term debt 1.18B, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 63.11B provides 5.96x coverage of total debt 10.59B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 9.33B provides strong 1597.62x coverage of stock compensation 5.84M, indicating sustainable incentive practices.
  • Tangible assets of 63.11B provide robust 80.35x coverage of other current liabilities 785.40M, indicating strong asset backing.

Bear case

  • Operating cash flow of 9.33B barely covers its investment activities of (4.40B), with a coverage ratio of -2.12, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (4.40B) provide weak support for R&D spending of 116.06M, which is -37.87x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 9.33B provides thin coverage of dividend payments of (2.05B) with a -4.55 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 5.10B represents just -10.07x of debt issuance (506.57M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating earnings of 5.80B show weak coverage of depreciation charges of 5.47B, with a 1.06 ratio indicating high capital intensity and potential reinvestment needs.

Segment consolidation items [axis] Breakdown of Revenue (2024)

Segments [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Integrated
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 XOM Exxon Mobil Corp 630.73 Bn 18.39 1.45 42.04 Bn
2 CVX Chevron Corp 360.16 Bn 29.26 2.14 41.54 Bn
3 TTE TotalEnergies SE 172.29 Bn 13.13 0.94 61.42 Bn
4 IMO Imperial Oil Ltd 99.73 Bn 51.19 4.54 2.90 Bn
5 BP Bp Plc 98.37 Bn 1,788.57 0.51 72.53 Bn
6 SU Suncor Energy Inc 67.22 Bn 15.56 1.87 10.59 Bn
7 CVE Cenovus Energy Inc. 38.97 Bn 17.12 1.04 7.27 Bn
8 NFG National Fuel Gas Co 7.90 Bn 12.06 3.32 2.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.90 1.02
EV to Cash from Ops. EV/CFO 6.30 11.79
EV to Debt EV to Debt 5.55 7.40
EV to EBIT EV/EBIT 10.13 19.95
EV to EBITDA EV/EBITDA 4.87 7.85
EV to Free Cash Flow [EV/FCF] EV/FCF 11.52 46.96
EV to Market Cap EV to Market Cap 0.87 1.30
EV to Revenue EV/Rev 1.63 2.01
Price to Book Value [P/B] P/B 2.04 2.14
Price to Earnings [P/E] P/E 15.56 168.60
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.54 0.95
Dividend Payout Ratio % Div Payout % (Qtr) 22.80 786.52
Dividend per Basic Share Div per Share (Qtr) 0.81 1.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 13.94 37.80
Interest Coverage Int. cover (Qtr) 0.00 42.88
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 5.38 -10.32
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 10.12 32.58
Dividend Growth (1y) % Div 1y % (Qtr) -60.78 -4.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 3.40 142.66
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -1.58 22.56
EBIT Growth (1y) % EBIT 1y % (Qtr) 2.04 35.32
EBT Growth (1y) % EBT 1y % (Qtr) 2.04 190.68
EPS Growth (1y) % EPS 1y % (Qtr) 8.00 511.78
FCF Growth (1y) % FCF 1y % (Qtr) -22.88 4.66
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.04 16.28
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.40 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.15 0.13
Cash Ratio Cash Ratio (Qtr) 0.36 0.27
Current Ratio Curr Ratio (Qtr) 1.39 1.06
Debt to Equity Ratio Debt/Equity (Qtr) 0.32 0.88
Interest Cover Ratio Int Coverage (Qtr) 0.00 42.88
Times Interest Earned Times Interest Earned (Qtr) 0.00 42.88
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 31.30 18.39
EBIT Margin % EBIT Margin % (Qtr) 22.08 6.19
EBT Margin % EBT Margin % (Qtr) 16.12 1.30
Gross Margin % Gross Margin % (Qtr) 59.40 30.31
Net Profit Margin % Net Margin % (Qtr) 12.00 -1.26