Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- SUNCOR ENERGY INC has improved earnings per share by 32.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, SUNCOR ENERGY INC increased its bottom line by earning $2.63 versus $1.71 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 20.8% when compared to the same quarter one year prior, going from $1,287.00 million to $1,555.00 million.
- SU's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
Suncor Energy Inc., together with its subsidiaries, operates as an integrated energy company. Suncor Energy has a market cap of $50.65 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 10.4, below the S&P 500 P/E ratio of 17.7. Shares are up 14.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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