Spanito wrote: Experienced, I don't agree with your remarks, we (long term investors) are way past being patient with this this sector. I got to wonder why you just joined Stockhouse on July 22, 2021, and tada here you are sounding "Very Professional" with your guidance to us sharehoulders about
being patient with Suncor or any Alberta Sands Projects. I smell BS, and I am calling it.
You are very good with your posts. Very convincing, and don't get me wrong you are right about what you are saying to lure new investors, if you have just bought SU then the future is bright for you. But, If you have been holding for 20 years,
it is dark like a dungeon hole.
These companies took on way too much debt. When things were good this sector spent the money like drunken sailors on shore leave.
Paying ridiculous wages to workers in this sector, I all too well know how they threw money away like it was never going to end. At my expense, and every shareholder.
I obviously believe now that you are 100% a worker for Suncor Management, or for a bank that supports Suncor. Or your here to make a quick buck this week. I'll leave this to what is is. And that is what you should be labelled as
by me and my team. Here is a little info for "Your Team", raise the dividend, or have the banks manipulate the share price higher, otherwise you can be be assured this forum will go on a rampage on destroying Suncor's image.
Stop trying to suck retail into this sector when Banks are clearly unloading. Try me, if you wish. I will post a hundred things about a SUNCOR Long Term investment. Suncor is clearly not a winner in today's world with how they have failed investors. And to everyone else that doesn't agree with me,
"please stop with your BS posts to sell your shares if you don't like holding SU shares", don't we all wish we could bend over and take it up the A$$ with loses from the Alberta Oil Sector. Easier said than done fools. I would rather wait it out, but Suncor needs to snap out of it, and get this going for us. One last kick at the bucket to let us sell our shares for a reasonable price, not for a massive loss. So Suncor wake up, Canadian will not be taken as fools anymore. It's pay back time for us old timers. Let us exit. Do something, anything, just get this going up! $35 is my exit plan. Later,
EXPERIENCED Profile | Stockhouse Fed up,
Spanito
Though yes you have good valid points that any changes to Suncor's 2021 gui
Experienced wrote: highalpha1 wrote: Management has clearly laid out the game plan for how excess free cash flow will be utilized in 2021 -- 2/3 will go towards debt and 1/3 will go toward share buybacks. Management has reiteration this allocation strategy over and over again, including during its Q1 conference call and its Investor's Day presentation.
The current NCIB was to buyback up to 44 million shares. As per their 2020 Q4 earnings statement (released on February 3, 2021): "Subsequent to the end of the quarter, the TSX accaepted a notice to commence NCIB for up to 44,000,000 common shares." During Q2 earnings call, the CEO explicitly stated that SU had exercised the NCIB by buying back 20 million shares from January to April 2021. I also know that SU has been buying loads of shares in May and June.
I would imagine by the time Q2 earnings are released on Wednesday, SU would be close to buying back 44 million shares this year (or at least very close to that number). Management has not expecting the amount of free cash flow that they are seeing. Back in late 2020, management was projecting between $1.5-$2.5 billion in free cash flow (of which $1.0-$1.5 billion was to go towards debt and $0.5-$1.0 billion was to go to share buybacks). Well, in Q1 alone, SU realized $1.4 billion in excess cash flow (beyond operating expenses and dividend payment). Even with production levels lower for Q2, higher oil prices will likely mean that even more money was made in Q2.
I am wondering how SU will spend that excess free cash flow. I would imagine they will announce a new NCIB, or, maybe raising the dividend. I fully understand that management has said a dividend hike should not be expected until 2022, but I think from the numbers that I am analyzing, there is sufficient FCF to hike the dividend immdiately (to at least C$0.26/quarter).
Nice analysis
Here is my take
SU will do another NCIB to cover the at least the rest of this year up to the maximum allowed by the regulators and will continue to pay down what debt that they can reasonably pay down subject to the agreements with their bankers. They will not raise the dividend until probably at least Q1 next year.
Why do I say this?
1....it is consistent with their previous guidance and they would be reluctant to change it since any change would raise questions as to why there was a change and whatever they said in response would just raise more questions - so it is better not to get into that corner
2....buybacks now at a clearly cheap price for the shares is plain and simple a good investment decision by management. Buybacks are a one-time cost/use of funds which makes all future earnings per share higher than they would be without it and this would be reflected in the share price at some time. A dividend increase is not a one-time thing and so they need to be careful about raising the dividend to make sure it is sustainable and they don't have to reduce it back again at some later point and lose credibility.
3...delaying a dividend increase gives time for more data regarding a post COVID world and whether the recent agreement by OPEC+ actually sticks. In a couple of quarters the answers to these questions will be a lot clearer.
Member Since: July 22, 2021