Suncor Smoked the Estimates

Just an all-round great quarter from one of Canada’s energy bellwethers.

| More on:
The Motley Fool

Suncor Energy (TSX:SU,NYSE:SU) is off to a great Tuesday morning.  The stock is up 3.5% thus far after quarterly results released last night handily topped expectations.

Operating earnings of $0.90/share blew away the consensus estimate of $0.75/share and handily topped the year ago figure of $0.84/share.

Not only were earnings strong but a 54% hike to the quarterly dividend and a re-load on the company’s $2 billion share buyback have many a Suncor shareholder dancing a jig this morning.

With a dividend payout of $0.20 per quarter, Suncor now yields 2.6%.  This yield is up from 1.7% under the old payout and brings it more in-line with industry juggernaut Exxon (NYSE:XOM) and its 2.9% yield.

A record-setting quarter from the company’s Refining and Marketing business helped offset a difficult, but still solid quarter out of the upstream oil sands operations.  Given the pricing difficulties that Canadian oil sands producers have had there were some question marks about how Suncor might be impacted.  Clearly, the value of the company’s integrated model shone through.

The only flag that I noticed was the decline in Return on Capital Employed that has occurred over the past year.  In the first quarter a year ago, this figure checked in at 14.7%.  It measured just 7.1% in this year’s first quarter, however charges related to the company’s shelved Vogeur refinery impacted this measure by 4%.

The stock’s rock bottom valuation helps one look past this issue with ROCE.

With its move to substantially hike the dividend, Suncor is gradually becoming a go-to option for dividend investors.  But if you like dividends, you need to click here to receive our special report titled “13 High-Yielding Stocks to Buy Today”.  This report is absolutely FREE and will have you rolling in dividend cheques before you know it.  You are just one click away from dividend nirvana!

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

Canadian stocks are rising
Dividend Stocks

1 Dividend-Growth Stock You Won’t Want to Miss in the Real Estate Sector

A growth-oriented REIT is a strong buy today after raising its dividend by more than 5% in each of the…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Investing

Retirement Investors: 3 TSX Stocks That Could Rally With the Economy 

Always buy stocks you are bullish on when they trade below their 52-week highs. A recovery rally can enhance your…

Read more »

some canadian stocks rose
Investing

3 Stocks I’ll Load Up on in 2023

Toronto-Dominion Bank (TSX:TD) is one stock I'll load up on in 2023. There are others, too.

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Dividend Stocks

Better Buy: Emera Stock vs. Hydro One

Higher-risk utility Emera should provide higher returns over the next five years, given the dip and its higher yield.

Read more »

Growing plant shoots on coins
Tech Stocks

3 Growth Stocks That Look Ready to Double in 1 Year

These three growth stocks are "sleeping giants" ready to blast off in 2023 and beyond for investors who pick them…

Read more »

Payday ringed on a calendar
Dividend Stocks

Passive-Income Hat Trick: 3 TSX Stocks to Buy for Monthly Cash

Investors seeking passive income can invest in these Canadian dividend stocks and earn attractive monthly passive income.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

Get Passive Income of $435/Month With This TSX Stock

Here’s how dividend investing in Canada could help you get reliable monthly passive income.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

2 Undervalued Growth Stocks to Buy Right Now

Once a growth stock becomes too heavily discounted or undervalued, investors begin to wonder about its ability to bounce back,…

Read more »