Suncor Energy (TSX:SU)(NYSE:SU) is a leading oil and gas company in North America. It’s highly profitable, it pays a generous dividend, and it has given investors a good way to hedge against inflation. But with oil prices potentially coming down, could it still be a good buy right now?
Last year, Suncor posted a profit of $8.3 billion on revenue of $52.2 billion. And today, the business is still in excellent shape. In May, the company reported its first-quarter earnings. During the period, it says its production in the oil sands was an all-time high at 785,000 barrels/day. And it hit record numbers of refined product sales as well. Amid the strong results, it returned $1 billion to investors, with $700 million paid in dividends and it also made $300 million in share repurchases.
Even though oil prices may not be as high as they have been in the past, the business has been strengthening its performance and improving the efficiency of its operations.
Suncor stock makes for an attractive option for income investors as it pays a dividend which yields 4%, which is more than twice the S&P 500 average yield of 1.4%. And at just nine times earnings, the stock is a relatively cheap option as well.
Shares of Suncor are up 25% this year and over the past three years, the stock has risen by around 70%. When including the dividend, investors’ total returns are north of 90%. With a good valuation and a solid dividend, Suncor is an excellent stock for investors to buy and hold right now.
