Low share price is $25mm per monthSU paid $27.47 on average for the 35mm shares it bought back between Feb 8, 2021 and the end of June.
With the share price under $24 per share, SU is saving close to $4 per share on its buyback program vs Q1/Q2. That equates to about $25mm per month based upon the 7mm shares they buy back each month. Not bad!
If SU needed to raise equity, the current share price would be a disaster. However, given that the company isn't looking for funding, the annual saving is currently running is about $300mm.
The company should save about $1.05 per share next year on the 76mm shares it is buying back if the company keeps its promise of raising the dividend by 25% per year through 2025. That equates to about $80mm of savings next year. The savings from the current share buyback (not taking any future share buybacks into consideration) should jump to about $150mm per year by 2025.
While the numbers are big, SU is a giant which means the per share numbers don't stand out.
If SU doesn't use the savings and future CAPEX allocations to recapture the imagination of the street via forward thinking green investments, investors who are upset about the reduced dividend will end up being vindicated. Unless the savings are re-allocated successfully, the money is better off in the hands of investors.
Companies that don't heed Biden's Energy Secretary Jennifer Granholm's words about adapting or dying will perish whether we like it or not.