Suncor Energy Inc Stock Hold Recommendation Reiterated (SU)

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 ( TheStreet) -- Suncor Energy (NYSE: SU) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.

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Highlights from the ratings report include:
  • SU's debt-to-equity ratio is very low at 0.28 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 1.09, which illustrates the ability to avoid short-term cash problems.
  • SU, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SUNCOR ENERGY INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, SUNCOR ENERGY INC reported lower earnings of $1.77 versus $2.63 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 139.4% when compared to the same quarter one year ago, falling from $1,427.00 million to -$562.00 million.

Suncor Energy Inc., together with its subsidiaries, operates as an integrated energy company. Suncor Energy has a market cap of $45.9 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 20.00, above the S&P 500 P/E ratio of 18.00. Shares are down 7.3% year to date as of the close of trading on Thursday.

You can view the full Suncor Energy Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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