Suncor Energy Inc's Dividend Analysis
Assessing the Dividend Profile of Suncor Energy Inc
Suncor Energy Inc (NYSE:SU) recently announced a dividend of $0.55 per share, payable on 2024-03-25, with the ex-dividend date set for 2024-03-01. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Suncor Energy Inc's dividend performance and assess its sustainability.
Understanding Suncor Energy Inc's Operations
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Suncor Energy Inc is an integrated energy company. The company's operations include oil sands development, production and upgrading, offshore oil and gas, petroleum refining in Canada and the U.S., and the company's Petro-Canada retail and wholesale distribution networks. The company is developing petroleum resources while advancing the transition to a low-emissions future through investment in power, renewable fuels, and hydrogen. It also conducts energy trading activities focused principally on the marketing and trading of crude oil, natural gas, byproducts, refined products, and power.
Suncor Energy Inc's Dividend Reliability
Suncor Energy Inc has maintained a consistent dividend payment record since 1994. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Analyzing Suncor Energy Inc's Dividend Yield and Growth
As of today, Suncor Energy Inc currently has a 12-month trailing dividend yield of 4.66% and a 12-month forward dividend yield of 4.79%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Suncor Energy Inc's annual dividend growth rate was 24.30%. Extended to a five-year horizon, this rate decreased to 6.50% per year. And over the past decade, Suncor Energy Inc's annual dividends per share growth rate stands at 7.20%.
Based on Suncor Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Suncor Energy Inc stock as of today is approximately 6.38%.
Assessing Dividend Sustainability Through Payout Ratios
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Suncor Energy Inc's dividend payout ratio is 0.44.
Suncor Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Suncor Energy Inc's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Projecting Growth: Suncor Energy Inc's Future Potential
To ensure the sustainability of dividends, a company must have robust growth metrics. Suncor Energy Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Suncor Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Suncor Energy Inc's revenue has increased by approximately 34.70% per year on average, a rate that outperforms approximately 84.31% of global competitors.
Conclusion: Evaluating Suncor Energy Inc's Dividend Prospects
In conclusion, Suncor Energy Inc's consistent dividend payments, coupled with an impressive dividend growth rate, payout ratio, profitability, and growth metrics, present an appealing case for value investors. The company's ability to maintain a healthy balance between paying dividends and retaining earnings for growth indicates a sustainable dividend policy. With a solid profitability rank and growth trajectory, Suncor Energy Inc appears to be on a path that could continue to reward shareholders with attractive dividend yields. As investors consider adding Suncor Energy Inc to their portfolios, they should also weigh these factors against their investment strategy and market conditions. Will Suncor Energy Inc's dividends continue to be a beacon of consistency in your investment journey?
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
