Rising oil prices support their dividends

Article Excerpt

Oil prices continue to improve as the global economy rebounds from COVID-19 shutdowns. That should support the current dividends from these two producers. They are also cheap in relation to their cash flow. SUNCOR ENERGY INC. $27 remains a buy. The company (Toronto symbol SU; Cyclical-Growth Payer Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $40.5 billion; Dividend yield: 3.1%; Dividend Sustainability Rating: Average; www.suncor.com) is Canada’s largest integrated oil firm, with major projects in the Alberta oil sands. Just as important, investors tap the company’s four refineries (three in Canada and one in Colorado), along with 1,750 Petro-Canada gas stations. Due to the COVID-19 pandemic, Suncor cut your quarterly dividend by 54.8%. Starting with the June 2020 payment, investors now receive $0.21 a share instead of $0.465. The new annual rate of $0.84 yields a still-solid 3.1% Suncor recently agreed to become an investor in Vancouver-based Svante Inc. That privately held firm is developing a process to capture carbon dioxide from natural gas boilers and…

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