The company posted an operating profit of $ 1.043 billion ($ 0.71 per common share) in the third quarter of 2021, compared to an operating loss of $ 338 million ($ 0.22 per common share) in the year-ago quarter. The company posted net income of $ 877 million ($ 0.59 per common share) for the third quarter of 2021, compared to a net loss of $ 12 million ($ 0.01 per common share) for the year-ago quarter.
With ample free cash flow, they were able to run down debt quickly. The shareholder return is more than impressive.
In the third quarter of 2021, the company gave $ 1.0 billion to shareholders through share buybacks totaling $ 704 million.
Suncor recently doubled its dividend and returned it to 2019 levels after a dividend cut. According to the announcement on October 28, the share price rose 9% when it opened. The share closed over 13% over the course of the day.
No sector is likely to generate greater free cash flow if current oil price levels are maintained or increased.
Thanks to Scott Barlow of Globe and Mail for this tweet.
The market is slowly becoming aware, offers this tweet from Liz Ann Sonders of Charles Schwab. Oil stocks vs. S&P 500:
On the same front, we’re also seeing commodities outperform stocks in 2021. Of course, it’s not an either-or, but the use of raw materials as a portfolio and lifestyle hedge.
There is always risk with any asset or asset class. In this post, Eric Nuttall, Portfolio Manager at Ninepoint Partners, addresses the risks of investing in oil and gas. Risks include the COVID-19 resurgence, the resumption of U.S. shale producers, and the cranking of OPEC members.
This is great read, and Eric offers a measured, but certainly investment-friendly attitude. The title of this post is «The Oil Party Has Just Begun».
Personally, I’m more than happy to have invited myself to the party. To invest or not is certainly a personal choice.
Some market history, just for fun
Nobody knows for sure how the stock markets will perform in any given period of time. But there are some seasonal trends in the game. November and December are usually strong months for stocks, especially when October is positive.
The following diagram shows the current month through October 26th.
Source: S&P Global