The Toronto Stock Exchange has many good investment choices for seasoned investors as well as beginners. But if you’re looking for long-term holdings that you don’t have to sell, Suncor (TSX: SU)(NYSE: SU) is one of the select few.
There are compelling reasons to invest in Suncor and be eternally on the winning side. Apart from being a prominent oil and gas integrated company in North America, the stock has an excellent record of delivering substantial gains to loyal shareholders.
The following are seven reasons why Suncor is the stock you can buy and not think about selling.
Industry leader
Suncor is a well-established integrated energy company that has been developing petroleum resource basins in oil sands. It also explores, acquires, develops, produces, and markets crude oil and natural gas in Canada and internationally.
It does the refining and transporting of crude oil as well as the marketing of petroleum and petrochemical products in the entire country. After operating for 66 years, Suncor is now an industry leader.
North America’s source of energy
Imagine North America without Suncor. This $62 billion company provide secure sources of energy to the region, as owner and operator of four oil refineries, an ethanol plant, wind farms, and more than 1,500 retail and wholesale outlets.
Growing energy portfolio
Suncor is not sitting on its laurels and decades of success. The company keeps growing its energy portfolio with an increasing concentration on renewable energy recently. With the addition of more strategic assets, you can expect Suncor to grow 9.5% annually over the next five years.
Hedge against oil price volatility
Some investors are wary about the Canadian energy sector because of the unpredictability and volatility of oil prices. Suncor is a cut above the rest because its integrated business structure serves as a hedge against lower oil prices.
The lower input costs in its refining operations is an advantage when the market is weak. Despite the weakness, the company realizes healthy margins after the sale of finished products.
Dividend all-star
Suncor is a dividend all-star. The company has been paying dividends for 15 consecutive years. Even during oil routs, the company generates income because it has a long pipeline of significant development projects.
If a company can maintain a dividend streak that long, you know you’ll be receiving an endless stream of passive or active income.
Wealth builder
With a dividend of nearly 4%, Suncor is the ideal stock to place in your TFSA or RRSP. Also, you won’t agonize over your investment going south should a recession come. The yield is standing on solid ground. The company’s balance sheet is strong, with not much debt on the liabilities side.
Buffett’s top energy stock
Lastly, legendary investor Warren Buffett is the indirect endorser of Suncor. His conglomerate sold all its Suncor shares in 2016. But in less than two years, Buffett saw the blunder and repurchased shares of Suncor in 2018. His action confirms that Suncor is a value stock with strong upside potential.
I can cite 50 other justifications, but I believe the seven reasons are more than sufficient to defend my position on Suncor. As an investor, you’ve got it made with this energy stock.
