Bullish Outlook for Suncor Energy
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Sep
12
Jonathan Yates
Bullish Outlook for Suncor Energy
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Steve Williams, the Chief Executive Officer of Suncor Energy (NYSE: SU), recently made a bullish presentation at the Barclay’s CEO Energy-Power conference.  This should be of particular interest for investors as major oil companies such as Suncor Energy, ConocoPhillips (NYSE: COP), and Chevron (NYSE: CVX) have done very well in recent market action.  Another bullish sign for Suncor Energy is that, like ConocoPhillips, it is a major holding of the legendary Warren Buffett, considered by many to be the greatest investors in history.

There is much for Buffett and other investors to like about Suncor Energy.  Like ConcoPhillips and Chevron, Suncor Energy is up sharply for 2013.  Over the last six months, it has risen almost 20%, as the chart below shows.

While that of that rise has to do with the disclosure that Buffettt owns Suncor Energy, has a solid appeal to growth, income, and value investors.  The forward price-to-earnings ratio is projected to be around 11.  That should please growth investors.

For those looking for income, Suncor Energy has a dividend yield of 2.13%.  That is above average as the mean dividend yield for a member of the Standard & Poor’s 500 Index (NYSE: SPY) is around 2%.  In addition, Suncor Energy has a low payout ratio compared to other major oil and gas companies.  That means that there is ample cash flow to raise the dividend or initiate buyback programs to reward shareholers.

There is also the political stability and security factor.

Based in Canada, like other oil firms such as Americas Petrogas (TSX: BOE) and Octagon 88 (OTCBB), Suncor Energy offers the political stability and security of North America.  With the current turmoil in Syria, that makes it a very appealing oil stock for investors.  After all, it passed the test for being owned by Warren Buffett!



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