Suncor Energy Inc

The stock I had been following was Petro-Can. Petro-Can, this was recently (2009) bought out by Suncor Energy Inc (TSX-SU). Petro-Can makes up 40% of the current Suncor company and the old Suncor company makes up the other 60%. At the recent Money Show, a number of people mentioned that Canadians should be buying Suncor for their portfolios. It was felt that the Suncor stock was a great way for us to get exposure to the Canadian Oil Sands in particular and oil in general.

By and large, my spreadsheet shows the past history for Petro-Can. However, it was hard to reconcile revenue as reported by past Petro-Can reports and the current Suncor report for 2009. I have added what I can of Suncor Revenue. However, no matter how I look at Revenue, there was a big drop in it for the year ending 2009. Petro-Can seems to have a big drop in revenue for 2009 as measured by Suncor statements. It could be that Suncor and Petro-Can measure revenue differently, but I could find no definite answer in the annual reports I read.

Not only was there a big decline in Revenues for this company in 2009, there also seemed to be a big decline in cash flow and earnings. When looking at the estimates for cash flow and earnings, these are expected to increase substantially in both 2010 and 2011. Also, for revenue, the revenues for the last 12 months have increase by some 27% over those of 2009.

For Petro-Can shareholders, if they had held their stock for the last 5 years, they should have made some money. Certainly, if they had held their stock for 10 years they would have made money. However, since the dividend payments on Petro-Can was quite low, the amount of total return from dividends each year would have been quite low at just over ½ of 1%.

The Liquidity Ratio has not been great on this stock, which has a 5 year average of just 1.03. However, the Liquidity Ratio for 2009 was a little better at 1.06 and is better again for the 3rd quarter of 2010 at 1.14. I would prefer to see this ratio at 1.50. The Asset/Liability Ratio has been better with a 5 year average of 1.94 and a current one of 2.09.

There is couple of good things to mention about this stock. The first thing is that there has been good growth in the Book Value and this has increased at the rate of just over 10% per year over the past 5 years. The other good thing is the growth in dividends. The yield was below 1% for most the life of Petro-Can and only broke through this level in 2008. The current dividend yield of 1.2% is nothing to write home about, but is better than it has been. The growth in dividends started to be good in 2006 and the growth in dividends over the past 5 years is at the rate of just over 26% per year.

I must admit that I do not invest much in resource stock, let alone oil companies. However, I do track a few. Tomorrow, I will look at what the analysts say about this stock.

Suncor Energy Inc. is an integrated energy company. Suncor's operations include oil sands development and upgrading, conventional and offshore oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand. Suncor is also developing a growing renewable energy portfolio. Their international and offshore business includes operations in the North Sea (United Kingdom, Netherlands and Norway) and the East Coast of Canada. They are also in Libya, Syria and Trinidad and Tobago. Its web site is here Suncor. See my spreadsheet at su.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.