Suncor Energy Inc T.SU

Low share price is $25mm per month

[Obscure1]

SU 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.

[Vlosun]

You can add the fact that Suncor will repeat these buybacks for the next 3 years. It can be estimated that 250 to 300 million shares will be repurchased at the start of 2025, in three and a half years. If they increase the dividend by 25 percent as planned it will therefore be $ 500 to $ 600 million that Suncor will save each year starting in 2025. With a lot of debt paid and a smaller dividend

[Experienced]

Good question! As you probably know, I have posted in the past that the company needs to develop a plan to morph into renewable energy company and to effectively communicate their strategy.  My other point was that I didn't see mgt needing to do this immediately. That said, if we look at your question from the perspective of mgt - what do they see? 1......the transition to renewables

[Tommy123]

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[Wynjoe]

I believe the opposite.Forget green energy,pay off debt,buy back as many shares as possible,increase divy when possible,and spend NOTHING on renewables.Suncor has billions of barrels of oil in the ground and these barrels will be in high demand for the life of Suncors produce able barrels. We are not a green energy project,never was,and never will be.Let others develop green,Suncor should sell

[Tommy123]

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[MigraineCall]

100% green energy? LOL! That is a bit extreme. You should sell now.   My money is in Suncor. I think that oil production will be around until we kill ourselves off, and it will be produced until it is no longer available. Through the next 100 years, long after we are gone, we will still need plastics, petrochemicals, ashpalt for roads, medicines, plastics, fertilizers, and even energy. Less