Suncor Energy Inc. (SU.TO) (TSE:SU) and Imperial Oil Limited (IMO.TO) (TSE:IMO) are both large-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.
Valuation & Earnings
This table compares Suncor Energy Inc. (SU.TO) and Imperial Oil Limited (IMO.TO)'s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Suncor Energy Inc. (SU.TO) | C$24.66 billion | 1.56 | C$-4,316,177,330.00 | C($2.83) | -8.93 |
Imperial Oil Limited (IMO.TO) | C$22.39 billion | 0.91 | C$-1,857,214,810.00 | C($2.53) | -11.02 |
Imperial Oil Limited (IMO.TO) has lower revenue, but higher earnings than Suncor Energy Inc. (SU.TO). Imperial Oil Limited (IMO.TO) is trading at a lower price-to-earnings ratio than Suncor Energy Inc. (SU.TO), indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Suncor Energy Inc. (SU.TO) and Imperial Oil Limited (IMO.TO), as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Suncor Energy Inc. (SU.TO) | 0 | 2 | 11 | 0 | 2.85 |
Imperial Oil Limited (IMO.TO) | 4 | 9 | 1 | 0 | 1.79 |
Suncor Energy Inc. (SU.TO) presently has a consensus target price of C$28.66, suggesting a potential upside of 13.42%. Imperial Oil Limited (IMO.TO) has a consensus target price of C$27.95, suggesting a potential upside of 0.22%. Given Suncor Energy Inc. (SU.TO)'s stronger consensus rating and higher probable upside, equities analysts clearly believe Suncor Energy Inc. (SU.TO) is more favorable than Imperial Oil Limited (IMO.TO).
Dividends
Suncor Energy Inc. (SU.TO) pays an annual dividend of C$1.10 per share and has a dividend yield of 4.3%. Imperial Oil Limited (IMO.TO) pays an annual dividend of C$0.88 per share and has a dividend yield of 3.2%. Suncor Energy Inc. (SU.TO) pays out -38.7% of its earnings in the form of a dividend. Imperial Oil Limited (IMO.TO) pays out -34.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Suncor Energy Inc. (SU.TO) is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Suncor Energy Inc. (SU.TO) and Imperial Oil Limited (IMO.TO)'s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Suncor Energy Inc. (SU.TO) | N/A | N/A | N/A |
Imperial Oil Limited (IMO.TO) | N/A | N/A | N/A |
Summary
Suncor Energy Inc. (SU.TO) beats Imperial Oil Limited (IMO.TO) on 8 of the 10 factors compared between the two stocks.