Suncor Energy Inc (SU.TO) Buy, Sell or Hold

Suncor Energy Inc (SU.TO)

97.01

+1.25 (1.31%)

as of Sep 24, 2026, 8:00:00 pm Market Open.

1173 watching

DON'T BUY

Dividend safe? They cut their dividend about a week ago. He is not as bullish on SU as it is the largest constituent of the energy index. This means anyone who has been hiding has probably already bought this, leaving less upside opportunity. It has a poorer cost base compared to its peers. They also have a large capex obligation in about two years. He thinks this will hold them back from being able to acquire some good low valued companies. There are better names out there.

BUY

CSH.UN-T vs. SU-T. They seem to have nothing relating to one another. Both have had a difficult time. There is a logical answer to this. Falling interest rates are the single biggest supporter of real estate values. We are at or near generational lows in interest rates. If you saw reflation then commodity assets would start to participate. He would own SU-T or CNQ-T if he were to own something in energy. He owns SU-T. He would sell CHR.UN-T in order to buy SU-T.

BUY ON WEAKNESS

With the US opening up (far too early in his opinion), he thinks we are in a bull market. Wait for a pullback from here. He does hold it, but wants to wait to see how the opening in the US goes. You should have an idea by September.

DON'T BUY

One-year outlook Doesn't follow it. Doesn't like commodities, because these companies don't set their product's price. It doesn't matter how good management is. Also, Canada lacks enough pipelines. He prefers pipelines like Enbridge over the oil producers. He has no idea where oil is going.

COMMENT

The yield is nearly 8%. We are seeing complete demand destruction. You may be able to trading in and out of it.

COMMENT

He would prefer to avoid this very cyclical sector right now. There is so much uncertainty and he does not have a lot of conviction around the Canadian energy producers. He would prefer to hold more infrastructure based companies like pipelines or mid-streamers. He thinks SU has staying power, but he is not sure the dividend might not get cut.

BUY

The stock is cheap. The problem is that the earnings forecast of -53 cents does not cover the dividend. It has a pretty strong balance sheet so he expects they can maintain all or some of that dividend. He suspects they could cut back on the dividend and it would not crater the stock. He thinks they should take the dividend down a bit so the market will not be so worried about it.

PAST TOP PICK

(A Top Pick Apr 25/19, Down 51%) He does not think they will cut the dividend. He is holding on to it at this point.

DON'T BUY

You have to like their operating cost. It is fairly low. No one is going to put new money into capital investment in the oil sands and this will benefit SU-T. It is the best house in a bad neighbourhood. He is not rushing into that sector right now.

PAST TOP PICK

(A Top Pick Apr 11/19, Down 44%) He continues to hold it because they have a 30 year plus reserve index. The spot price of oil i actually above their costs. They also have downstream integration. The dividend is safe.

COMMENT

The composition of this ETF has become highly concentrated. Five names account for 78% of its value. CNQ and SU account for most it. Both of those names have rallied well compared to their peers as buyers in the US have been stepping in. However, their hedge books are naked to oil prices right now. He would prefer to own small cap names with good hedge books, if you select the right ones he thinks.

DON'T BUY

He had a sensitivity sheet that calculated SU is burning through about $4.1 billion at $30 oil. They would have adequate capacity if they were to cut the dividend -- not 100%, because they would be dropped from the dividend funds. He thinks he could do better in other names. Yield 8.3%

PARTIAL BUY

He thinks pipelines would be safer, although this price level could be a good entry level. This is the go to producer in the energy space. He has a buy recommendation with a $40 target. He would still wait for another couple of weeks to learn more about the impact of COVID-19. Will they cut back the yield? He is not sure. He would suggest buying half of your entry amount here.

DON'T BUY

Oil Companies. The war between Saudi Arabia and Russia may be a concerted effort to put marginal producers out of business. It is an unpredictable battle.

HOLD

Is the petro Canada station down the street going to be there for the foreseeable future? Of course. This stock is going back to $30 or $40 eventually but this is not the time to get into speculative names. There are going to be a lot of bankruptcies and this is the name that will buy them out at a huge discount.

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Suncor Energy Inc (SU.TO)