Sound bite for Twitter is: Dividend Growth Resource. Results of stock price testing is that the stock price is probably reasonable. Debt Ratios are fine. The Dividend Payout Ratios (DPR) are good. The current dividend yield is moderate with dividend growth low. See my spreadsheet on Suncor Energy Inc.
Is it a good company at a reasonable price? Personally, I do not have much invested in Energy stock, around 1%. Energy stocks are cyclical and I like dividend growth stocks. Energy stocks make up around 16% of the TSX. There is a risk in buying cyclical stocks. If you look at the chart for this stock, the price is relatively high recently. Currently the stock is testing as reasonably priced.
I do not own this stock of Suncor Energy Inc (TSX-SU, NYSE-SU). I started following this stock as Petro-Canada (TSX-PCA). It was on Mike Higgs’ list of dividend growth stocks. This was also a key stock for the Investment Reporter. Note that PCA and SU merged in 2009.
When I was updating my spreadsheet, I noticed that this stock is mostly cyclical, but has been doing better lately. The stock has gone up in the last two years and is up by 7% so far this year. I noticed that all the estimates for 2025 are lower than the 2024 values. For example, revenue in 2024 was $54,881M but estimate for 2025 is $48,068M and AEPS for 2024 was 5.40, but estimate for 2025 is $4.16. Same for Cash Flow and Net Income.
If you had invested in this company in December 2014, for $1,033.20 you would have bought 28 shares at $36.90 per share. In December 2024, after 10 years you would have received $420.98 in dividends. The stock would be worth $1,436.68. Your total return would have been $1,857.66. This would be a total return of 6.78% per year with 3.35% from capital gain and 3.43% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $36.90 | $1,033.20 | 28 | 10 | $420.98 | $1,436.68 | $1,857.66 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.16%. The 5, 10 and historical median dividend yields are also moderate at 4.74%, 3.85% and 3.14%. The dividend increases are low (below 8%) at 5.6% per year over the past 5 years. The last dividend increase was in 2024 and it was for 4.6%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at 47% with 5 year coverage at 48%. The DPR for 2024 for Adjusted Funds from Operations (AFFO) is good at 20% with 5 year coverage at 23%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 41% with 5 year coverage at 29%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 20% with 5 year coverage at 19%. The DPR for 2024 for Free Cash Flow (FCF) is good at 38% with 5 year coverage at 37%. There is some agreement on what the FCF is.
| Item | Current | 5 Years |
|---|---|---|
| EPS | 46.72% | 47.57% |
| AFFO | 20.29% | 22.74% |
| AEPS | 40.83% | 29.13% |
| CFPS | 19.82% | 18.67% |
| FCF | 38.08% | 37.24% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.15 and currently at 0.18. The Liquidity Ratio for 2024 is low at 1.14 and good at 1.51 currently. If you added in Cash Flow after dividends, the ratios are fine at 2.37 and currently at 2.61. The Debt Ratio for 2024 is good at 1.98 and 1.99 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.02 and 1.02 and currently at 2.01 and 1.01.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.15 | 0.18 |
| Intang/GW | 0.05 | 0.05 |
| Liquidity | 1.14 | 1.51 |
| Liq. + CF | 2.37 | 2.61 |
| Debt Ratio | 1.98 | 1.99 |
| Leverage | 2.02 | 2.01 |
| D/E Ratio | 1.02 | 1.01 |
The Total Return per year is shown below for years of 5 to 29 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 5.59% | 7.36% | 3.81% | 3.55% |
| 2014 | 10 | 8.01% | 6.78% | 3.35% | 3.43% |
| 2009 | 15 | 14.22% | 4.76% | 2.17% | 2.60% |
| 2004 | 20 | 15.91% | 6.89% | 4.49% | 2.40% |
| 1999 | 25 | 13.91% | 10.60% | 7.96% | 2.64% |
| 1995 | 28 | 12.57% | 14.04% | 10.73% | 3.31% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 5.93, 6.74 and 7.56. The corresponding 10 year median ratios are 7.65, 9.31 and 10.97. The corresponding historical median ratios 8.65, 11.61 and 14.17. The current ratio is 13.65 based on a stock price of $54.86 and EPS estimate for 2025 of $4.02. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) Data. The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.86, 8.37 and 9.38. The corresponding 10 year median ratios are 7.59, 8.97 and 10.60. The corresponding historical median ratios 9.96, 12.40 and 14.84. The current ratio is 13.89 based on a stock price of $54.86 and AEPS estimate for 2025 of $3.95. The current ratio is 13.19 based on a stock price of $54.86 and AEPS estimate for 2025 of $4.16. The current ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $57.73. The 10-year low, median, and high median Price/Graham Price Ratios are 0.76, 0.91 and 1.17. The current ratio is 0.95 based on a stock price of $54.86. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.36. The current ratio is 1.54 based on a Book Value of $44,308M, Book Value per Share of $35.61 and a stock price of $54.86. The current ratio is 13% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have a Book Value per Share estimate for 2025 of $32.27. This implies a ratio of 1.70 based on a stock price of $54.86 and Book Value of $40,155M. This ratio is 25% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 6.45. The current ratio is 5.02 based on Cash Flow per Share estimate for 2025 of $10.93, Cash Flow of $13,601M and a stock price of $54.86. The current ratio is 22% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 3.14%. The current dividend yield is 4.16% based on a stock price of $54.86 and Dividends of $2.28. The current dividend yield is 32% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 3.85%. The current dividend yield is 4.16% based on a stock price of $54.86 and Dividends of $2.28. The current dividend yield is 8% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
The 10-year median Price/Sales (Revenue) Ratio is 1.71. The current P/S Ratio is 1.42 based on Revenue estimate for 2025 of $48,068, Revenue per Share of $38.63 and a stock price of $54.86. The current ratio is 17% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable. The 10 year median dividend yield says that the stock price is probably reasonable. The P/S Ratio test says the stock price is probably reasonable and so confirms the 10 year median dividend yield test. Not that for the rest of the testing the stock price is showing as cheap to expensive.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (8), Hold (8) and Sell (1). The consensus is a Buy. The 12 month stock price consensus is $60.00 with a high of $66.00 and low of $43.00. the consensus stock price of $60.00 implies a total return of $13.53% with 9.37% from capital gains and 4.16% from dividends based on a current stock price of $54.86.
There are lots of entries for 2025 on Stock Chase. Analysts like this stock and most think it is a buy, but there is also a Hold rating. Chris MacDonald on Motley Fool is bullish on this stock. Amy Legate-Wolfe on Motley Fool compared this stock with CNQ. The company put out a press release via Energy Now about their fourth quarter results for 2024. The company put out a Press Release via Energy Now about their first quarterly results for 2025.
Simply Wall Street via Yahoo Finance writes about this stock. Simply Wall Street has two warnings out on this stock of earnings are forecast to decline by an average of 3.5% per year for the next 3 years; and unstable dividend track record.
Suncor Energy Inc is an integrated energy company. The company’s operating segments include Oil Sands, Exploration & Production, Refining & Marketing (R&M), and Corporate & eliminations. Geographically, the company generates a majority of its revenue from Canada. Its web site is here Suncor Energy Inc.
The last stock I wrote about was about was Jamieson Wellness Inc (TSX-JWEL, OTC-JWLLF) … learn more. The next stock I will write about will be TMX Group Ltd (TSX-X, OTC-TMXXF) … learn more on Monday, July 14, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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