The view from 40,000 feetI get caught up as much as anyone else in trying to time the market. Well maybe not everyone, but I'm probably as addicted as most of us here as I enjoy the sport.
I bought Suncor shares last August because it made sense to me to buy shares at $23 when WTI was in the low $60's. Pre-pandemic, the price of oil was in the low $60's and the share price was around $44. Suncor had slashed about $1.5 billion of operating expenses in response to the pandemic which amounted to $1 per share. The shares were yielding around 4% based upon a $0.84 per year dividend. It seemed like a no-brainer at the time despite the media being in a frenzy over ESG.
So where we are today?
* The company doubled its dividend from $0.84 to $1.68 so it still yields around 4% and it wouldn't surprise me at all to see another increase
* WTI is bouncing around US$100 per barrel which generates what some who don't own SU shares might consider to be unconscionable cash flows
* The company continues to pay down debt faster than any time in its history and could possibly be debt free by the end of 2024 if not sooner if oil prices remain at current levels
* The company bought back 84 million shares last year and is expected to buy back a similar amount this year so we are looking at about 10% less shares than in the days before the pandemic started
* The company continues to successfully implement its 5 year to drive its costs down
* The company has refocused it's green strategy "locally" via it core strengths
Oil prices are going to jump around. The stock price is going to jump around.
The view from 40,000 feet is that the underlying investment is getting better and better. The Suncor Board of Directors obviously agrees as they keep buying back about 300,000 shares per day.
Until I see something that changes my opinion about where oil prices are headed, or until the market begins vomitting red numbers, I'm just going to sit on my shares collecting 4%. I will just eat more chocolate when I feel compelled to "do something".