Are you informed on the company strategy? I've been reading a lot of posts taking shots on company actions including hiking the dividend.
While I get people invest for different reasons, there appears to be a lot of uninformed people posting. My recommendation for the uniformed investors is to spend sometime reviewing the company strategy which clearly outlines how this company will deploy capital. If you are not on board with the direction then find a different investment.
https://www.suncor.com/en-ca/investors/investor-day-2021
Suncor is executing the strategies and I for one am 100% onboard with the direction they are going. It will drive shareholder value and returns.
No where did I see or hear that is was their strategy to significantly grow this company. Rather, the focus is on good capital management, maximizing return on investment, reducing costs, improving margin and making selective investments with a clear ROI.
Why are they doing this? To maximize returns to shareholders who are the owners of the company and to whom the board is accountable to. Makes sense doesn't it. Multi-prong approach:
- Lower operating costs
- Manage sustaining capital
- Share buybacks
- Strengthen balance sheet through debt reduction
- Paymore to shareholders in the form of Dividends
Enhancing free cashflow is the agenda (not investing in mega projects) as it allows the company to.....buy back shares......pay down debt.....payshareholders
All in all a great mix to deliver shareholder value and returns!
I'm done preaching. The point is, spend the time to understand what the strategy is and why. From there you can point out where management isn't executing or be on board when they are (like now).
The dividend is way more sustainable today as a result of strategy execuion and this will pave the way to future divident increases. If oil is stable and/or continues to increase I'm confident we will continue to see acceleration of the strategic elements they are focused on. Equals accelerated returns for the ownership group (shareholders).
GLTA