Suncor’s dividend yield
Suncor Energy (SU) is the last stock on the list of top eight integrated energy dividend payers. The company’s market cap of around $62 billion places it in the last spot among the eight integrated energy stocks. Suncor’s dividend yield currently stands at 3.4%. In 1Q18, Suncor announced a dividend of 0.36 Canadian dollars per share (or $0.28 per share). This was announced on February 7, 2018, and will be paid on March 26, 2018. SU has consistently paid dividends despite the oil price volatility witnessed in the last few years. Plus, dividends have risen. Suncor made a dividend payment of 0.28 Canadian dollars per share on March 25, 2015. In the same period, Suncor’s stock price rose 11%.
Suncor trades at a forward PE of 18.3x, above the peer average forward PE of the eight integrated energy stocks discussed in the series. Suncor also trades above the average forward EV-to-EBITDA. The stock trades above the peer averages on both the valuation matrices likely due to improving financials and growth prospects. Suncor saw a steep rise in its cash flow from operations in 2017 over 2016. Suncor also has a robust upstream project pipeline, which includes projects like Fort Hills and Hebron. This pipeline is likely to bring in growth for the company in the form of higher production. In fact, Hebron already started production in 4Q17.
In this series, we ranked eight integrated energy companies based on their dividend yields. BP (BP) stood at the top of the list with the highest dividend yield of 6%, followed by Royal Dutch Shell (RDS.A), ENI (E), and Total (TOT).
BP, Shell, and TOT portrayed relatively higher dividend yields and lower forward PEs. However, ENI is the only stock in the top four that showed higher dividend yields but with higher valuations. Then we looked at ExxonMobil (XOM), Chevron (CVX), and Suncor Energy (SU), all of which portrayed the contrary, lower dividend yields and higher forward PEs. However, Statoil (STO) held relatively lower dividend yields with lower forward PE. In terms of valuations, ExxonMobil (XOM), Chevron (CVX), and Suncor Energy (SU) commanded premium valuations on both the valuation matrices.
In terms of stock prices, six of the eight stocks have risen in the past three years. However, ENI and XOM stock prices have fallen in the same period.