Spinoff spotlight: Suncor Energy

Article Excerpt

SUNCOR ENERGY INC. $40 is still a buy. The company (Toronto symbol SU; Resources sector; Shares outstanding: 1.44 billion; Market cap: $57.6 billion; Dividend yield: 4.7%; Takeover Target Rating: Medium; www.suncor.com) is Canada’s largest integrated oil firm, with major projects in the Alberta oil sands. Suncor also operates four refineries, along with 1,875 Petro-Canada gas stations. Mark Little has now resigned as Suncor’s CEO and from its board of directors. That was due to the death of a contractor at its oil sands project near Fort McMurray, Alberta. Since 2014, 13 employees or contractors have died in accidents at the company’s operations. That poor safety record is partly why the stock has lagged its peers despite the jump in crude oil prices. It’s also why activist investment firm Elliott Management is now pressuring the company to improve safety, which will let it meet its production targets. The activist also wants Suncor to sell or spin off its network of gas stations. Elliott feels these moves would boost…

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