Suncor Energy Inc T.SU

Will SU bump the dividend when we get Q2 earnings in 45 days

[Marner16]

Mgmt provided guidance for 2021 in early February which was based upon US$55 for WTI

The guidance did not include an increase in the dividend this year, but it did mention a tight range of reduced CAPEX ($4 billion), a NCIB ($1 billion plus), and debt repayment ($1 billion plus).

The guidance indicated that WTI at $35 covered CAPEX and the dividend.  Therefore the company should be piling up two plus billion of cash per quarter above and beyond the CAPEX and dividend.

SU has already paid back all of the debt that it can this year without paying penalties for early replayment.  I expect that they will have bought back most if not all of the 44 million shares available this year via the NCIB.

What is SU going to do with all of the extra cash? 

I'm in favour of paying down debt and buying back shares (it the share price is under valued). 

However, when you can't pay down any more debt and you have bought back all the shares that you can, it only makes sense to use the excess cash to increase the dividend.

[Thor16]

It is highly likely no increase until next year.  Share buyback will almost certainly be increased beyond the original approved amount.  For our purposes it makes sense to hold off on the dividend.  As long as shares stay undervalued (which they seemingly are) the math compounds in our favour.  I'd prefer buying back a dollar worth of value for 75 cents as compared to

[Thor16]

Sorry NCIB not SIB.  Also to clarify meant our purposes as shareholders.

[NPCexe]

Agreed, they will not change the established course and raise the div early. Because of this, however, the stock is lagging. I don't care at all about the dividend, so long as SU gets to prepandemic levels. The only hope in achieving this now is for oil to continue rising and there being no market correction before then.

[Marner16]

Thor16:  The NCIB extends to February 7, 2022.  I have been searching for information or incidences where a company can or has gone back to an exchange and changed the terms of the NCIB (as in increasing the share buyback numbers).  I haven't found anything.  Does anyone here know of situations where companies have asked for and received permission to increase the number

[Thor16]

Hey Marner16, I could send you some specific examples if you'd like.  I wouldnt call it common however I wouldn't call it uncommon either.  If you'd like a few send me a pm and I'll send you a few links.  I don't know how to PM or I would have just sent a few.

[PabloLafortune]

IMO, Suncor should stop the buybacks, continue reducing debt, increase the dividends to the max, make it variable, pay 50% in cash and 50% tax efficiently in the form of Earthcor shares, a publicly traded renewable energy company created by Suncor.  Investors who want no part in renewable energy can always sell their Earthcor shares but regardless, every quarter Earthcor gets $$$ from Suncor

[thegreattimario]

Su should stop the buybacks they will never make an impact. It is creating very little value for shareholders.