Buy Suncor now for the numbers coming in the futureOne reason for the current melt down in the S&P is higher borrowing costs put a drag on company earrings and investor investment. Many companies consistently roll over, and take on new, debt as an ongoing business practice. Sometimes taking on new debt is seen as a positive because it means "growth".
For Suncor each quarter more existing debt is being vaporized. The likelihood of the dividend ever being cut in the future again becomes less and less as debt disappears. Two years ago Suncor had to rely on new debt, and cutting the dividend, to afford making it through the negative oil price shock. The market really did not like that occurring and SU participated in the melt down on steroids.
Fast forward two years and a $100 - $150 share price is now totally in the cards as Suncor now becomes the financial monster it always promised to be:
- higher oil prices and way higher cracking prices especially for diesel which suites Suncor's feedstock
- Already and then within a few years Suncor will have very low or even possibly no debt.
- The share float is being eaten up by current around 650,000 per day.
- The dividend will be raised by another 12.5% at some point this year because that’s what they promised.
- Meanwhile Suncor operations became very lean and production costs are lowest ever on a relative basis.
- Monster earnings ahead. If oil and cracking profits remain where they are currently at I could see Q2 earnings at $3+ easily. That would make forward PE of 4.
Vlad has gone too far and is unlikely to compromise meaning the horror in the Ukraine could extend for some time. This will affect the hydro-carbon market for likely years to come keeping oil elevated. This unfortunate circumstance is very positive for Suncor's finacial future.