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Here's Why it is Worth Investing in Sunoco (SUN) Stock Now
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Sunoco LP (SUN - Free Report) has gained 47.6% in the past year compared with the industry’s 25% growth.
The Zacks Consensus Estimate for Sunoco’s 2023 and 2024 earnings per share (EPS) is pegged at $5.19 and $3.83, respectively.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
Infrastructure and Operational Strength:The Zacks Rank #1 (Strong Buy) partnership is one of the largest refined product terminal operators in the United States, with high-quality assets that are valuable in various energy transition scenarios. This diversification strengthens its market position and offers stability.
Volume Growth: The partnership demonstrated significant growth, with fuel volumes reaching 2.1 billion gallons, a 7% increase from the previous year. This marks the highest-volume quarter in SUN’s history. This growth is attributed to strategic acquisitions and organic expansion, signaling a strong market position and expansion potential.
Capital Allocation Strategy: SUN’s capital allocation strategy focuses on maintaining secure distributions with annual growth, protecting the balance sheet, and investing in high-return projects and accretive acquisitions. This approach has resulted in a stable financial position and promising growth prospects.
Positive Outlook and Guidance: SUN raised its 2023 EBITDA guidance to above $935 million, banking on continued strong performance. For 2024, the partnership expects adjusted EBITDA between $975 million and $1 billion. Management's forward-looking statements suggest a solid foundation for sustained growth and profitability.
These factors suggest that SUN is well-positioned for sustained growth, making it an attractive option for investors seeking stability and growth potential in the energy sector.
The Williams Companies (WMB - Free Report) is a premier energy infrastructure provider in North America. WMB has a thriving deepwater transportation business. The company's deepwater portfolio includes a 3,500-mile natural gas and oil gathering and transmission pipeline, and is important for future cash flows.
WMB’s debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. It is also paying shareholders an attractive dividend yielding around 5%. Beside this, it has a share repurchase program worth $1.5 billion, highlighting its commitment to shareholders.
Ecopetrol S.A. (EC - Free Report) operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.
Ecopetrol has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The Zacks Consensus Estimate for EC’s 2023 and 2024 EPS is pegged at $2.32 and $2.41, respectively.
Murphy USA’s (MUSA - Free Report) unique high-volume and low-cost business model helps it retain high profitability, even in the fiercely competitive retail environment.
MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the fuel retailer recently approved a repurchase authorization of up to $1.5 billion, following the completion of the existing $1-billion mandate. The move underscores MUSA’s sound financial position and commitment to rewarding its shareholders.
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Here's Why it is Worth Investing in Sunoco (SUN) Stock Now
Sunoco LP (SUN - Free Report) has gained 47.6% in the past year compared with the industry’s 25% growth.
The Zacks Consensus Estimate for Sunoco’s 2023 and 2024 earnings per share (EPS) is pegged at $5.19 and $3.83, respectively.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
Infrastructure and Operational Strength:The Zacks Rank #1 (Strong Buy) partnership is one of the largest refined product terminal operators in the United States, with high-quality assets that are valuable in various energy transition scenarios. This diversification strengthens its market position and offers stability.
Volume Growth: The partnership demonstrated significant growth, with fuel volumes reaching 2.1 billion gallons, a 7% increase from the previous year. This marks the highest-volume quarter in SUN’s history. This growth is attributed to strategic acquisitions and organic expansion, signaling a strong market position and expansion potential.
Capital Allocation Strategy: SUN’s capital allocation strategy focuses on maintaining secure distributions with annual growth, protecting the balance sheet, and investing in high-return projects and accretive acquisitions. This approach has resulted in a stable financial position and promising growth prospects.
Positive Outlook and Guidance: SUN raised its 2023 EBITDA guidance to above $935 million, banking on continued strong performance. For 2024, the partnership expects adjusted EBITDA between $975 million and $1 billion. Management's forward-looking statements suggest a solid foundation for sustained growth and profitability.
These factors suggest that SUN is well-positioned for sustained growth, making it an attractive option for investors seeking stability and growth potential in the energy sector.
Other Stocks to Consider
Investors interested in the energy sector might look at the following companies that also presently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here
The Williams Companies (WMB - Free Report) is a premier energy infrastructure provider in North America. WMB has a thriving deepwater transportation business. The company's deepwater portfolio includes a 3,500-mile natural gas and oil gathering and transmission pipeline, and is important for future cash flows.
WMB’s debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. It is also paying shareholders an attractive dividend yielding around 5%. Beside this, it has a share repurchase program worth $1.5 billion, highlighting its commitment to shareholders.
Ecopetrol S.A. (EC - Free Report) operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.
Ecopetrol has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The Zacks Consensus Estimate for EC’s 2023 and 2024 EPS is pegged at $2.32 and $2.41, respectively.
Murphy USA’s (MUSA - Free Report) unique high-volume and low-cost business model helps it retain high profitability, even in the fiercely competitive retail environment.
MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the fuel retailer recently approved a repurchase authorization of up to $1.5 billion, following the completion of the existing $1-billion mandate. The move underscores MUSA’s sound financial position and commitment to rewarding its shareholders.