Suncor Energy Inc. president and CEO Rich Kruger waits to appear before the House of Commons Standing Committee on Natural Resources in Ottawa, Monday, Oct. 16, 2023. THE CANADIAN PRESS/ Patrick Doyle · The Canadian Press
Suncor Energy (SU.TO)(SU) has no true peers in Canada, CEO Rich Kruger said on Wednesday, after the integrated oil producer booked a record quarter and hiked its dividend in the face of weaker crude prices.
The Calgary-based company chose Michael Jackson’s 1982 hit “Beat It” as the hold music for investors on Wednesday morning’s conference call. UBS analyst Manav Gupta picked up on the joke, and praised the song selection.
“It stuck me, that’s what Suncor has become. Keep raising expectations, and then beat it,” he said.
Suncor topped analyst estimates on a number of fronts in the three months ended Sept. 30. The company says upstream production and refinery throughput snapped records in the third quarter, helping to offset the hit from lower oil prices.
At the same time, Suncor announced that its common share dividend will rise by about five per cent to an annualized rate of $2.40 per share.
On Wednesday’s conference call, Doug Leggate with Wolfe Research called the pace of Suncor’s dividend growth “glacial” versus one of its chief rivals, Imperial Oil (IMO.TO)(IMO). Kruger was Imperial’s CEO between 2013 and 2019.
“You talk about a peer, or peers. I honestly don’t think we have a true Canadian peer,” Kruger said, referring to Suncor’s “unique assembly” of upstream and downstream assets.
“I think we have an ability over a much wider range of market conditions to deliver predictable, reliable cash flow.”
Suncor’s Toronto-listed stock gained over five per cent in mid-day trading on Wednesday.
Suncor says it returned over $1.4 billion to shareholders in the third quarter, comprising $750 million in share repurchases and $700 million in dividends.
“I strongly believe buying our stock is our best investment, and we intend to keep buying it month after month,” Kruger said. “We want to be a cash machine that invests wisely, and returns capital to shareholders predictably and reliably.”
Suncor’s top executive says investors can expect the company to share new long-term plans sometime after February of next year. This outlook, he says, will address the looming question of how Suncor will replace production from its ageing Base Mine operations north of Fort McMurray, Alta.
“Everybody wants to say, ‘What the hell is going to happen when the Base Mine depletes?’ We owe you and will present a very compelling long-term value proposition on bitumen development and replacement,” Kruger said.
RBC Capital Markets analyst Greg Pardy topped his Suncor research note on Wednesday with the heading “Big Numbers Speak Loudly.” He maintains an “outperform” rating on the company’s stock, with a $67 per share one-year price target.