We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sunoco (SUN) Signs Deals to Restructure Its Business Portfolio
Read MoreHide Full Article
Sunoco LP (SUN - Free Report) announced a significant shift in its business operations with a series of major transactions.
The prominent motor fuels distributor announced plans to sell 204 convenience stores in West Texas, New Mexico and Oklahoma to retail giant, 7-Eleven Inc. The deal, valued at $1 billion, marks a crucial move for Sunoco in reshaping its business portfolio.
As part of this sale, Sunoco is set to amend its existing take-or-pay fuel supply agreement with 7-Eleven. The amendment aims to incorporate additional fuel gross profit, enhancing the financial benefits of the deal for Sunoco. The sale proceeds are expected to play a crucial role in SUN’s future financial strategy.
Sunoco plans to use these funds to significantly reduce its debt level, strengthening its balance sheet. The move is anticipated to help the company capitalize on growth opportunities, while continuing to ensure robust distribution growth.
Simultaneously, Sunoco announced plans to expand its international footprint by acquiring liquid fuel terminals located in Amsterdam, Netherlands and Bantry Bay, Ireland. The assets are being acquired from Zenith Energy. The financial details of the transaction have not been disclosed.
The acquisition is strategically aimed at optimizing the supply for Sunoco’s existing East Coast business. It also aligns with the company’s ongoing focus on expanding its portfolio with stable midstream income sources.
Sunoco expects the tuck-in acquisition to be financially beneficial, projecting it to be accretive to unitholders from the first year of ownership. The funding for the acquisition will be sourced from Sunoco’s revolving credit facility. The company anticipates the deal to close in the first quarter of 2024.
The transactions came at a time when Sunoco is reaffirming its financial guidance for 2024, with an EBITDA projection between $975 million and $1 billion. The guidance reflects the company’s confidence in its strategic direction and its ability to generate sustainable, long-term value for its stakeholders.
Overall, these developments indicate a period of significant transformation for Sunoco as it seeks to balance its portfolio through strategic divestitures and acquisitions. The company’s moves are seen as active measures in adapting to the changing dynamics of the fuel distribution and retail industry, positioning it for growth and stability.
The Williams Companies, Inc. (WMB - Free Report) is a premier energy infrastructure provider in North America. WMB has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days.
Williams Companies’ debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. WMB is also paying its shareholders an attractive dividend yielding around 5%. Beside these, the company has a share repurchase program worth $1.5 billion, highlighting its commitment to shareholders.
Enbridge Inc. (ENB - Free Report) has the longest and most advanced crude and liquid pipeline system in the world. ENB has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days.
Enbridge has a strong commitment to returning capital to shareholders. The company consistently outperforms the composite stocks within the oil energy sector by offering higher dividends. Over the majority of the last five years, ENB consistently yielded higher dividends than its sector counterparts.
Helix Energy Solutions Group, Inc. (HLX - Free Report) is an international offshore energy company that provides specialty services to the offshore energy industry, with a focus on their growing well intervention and robotics operations.
Helix Energy has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The Zacks Consensus Estimate for HLX’s earnings for 2023 and 2024 is pegged at 21 cents and 71 cents per share.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Sunoco (SUN) Signs Deals to Restructure Its Business Portfolio
Sunoco LP (SUN - Free Report) announced a significant shift in its business operations with a series of major transactions.
The prominent motor fuels distributor announced plans to sell 204 convenience stores in West Texas, New Mexico and Oklahoma to retail giant, 7-Eleven Inc. The deal, valued at $1 billion, marks a crucial move for Sunoco in reshaping its business portfolio.
As part of this sale, Sunoco is set to amend its existing take-or-pay fuel supply agreement with 7-Eleven. The amendment aims to incorporate additional fuel gross profit, enhancing the financial benefits of the deal for Sunoco. The sale proceeds are expected to play a crucial role in SUN’s future financial strategy.
Sunoco plans to use these funds to significantly reduce its debt level, strengthening its balance sheet. The move is anticipated to help the company capitalize on growth opportunities, while continuing to ensure robust distribution growth.
Simultaneously, Sunoco announced plans to expand its international footprint by acquiring liquid fuel terminals located in Amsterdam, Netherlands and Bantry Bay, Ireland. The assets are being acquired from Zenith Energy. The financial details of the transaction have not been disclosed.
The acquisition is strategically aimed at optimizing the supply for Sunoco’s existing East Coast business. It also aligns with the company’s ongoing focus on expanding its portfolio with stable midstream income sources.
Sunoco expects the tuck-in acquisition to be financially beneficial, projecting it to be accretive to unitholders from the first year of ownership. The funding for the acquisition will be sourced from Sunoco’s revolving credit facility. The company anticipates the deal to close in the first quarter of 2024.
The transactions came at a time when Sunoco is reaffirming its financial guidance for 2024, with an EBITDA projection between $975 million and $1 billion. The guidance reflects the company’s confidence in its strategic direction and its ability to generate sustainable, long-term value for its stakeholders.
Overall, these developments indicate a period of significant transformation for Sunoco as it seeks to balance its portfolio through strategic divestitures and acquisitions. The company’s moves are seen as active measures in adapting to the changing dynamics of the fuel distribution and retail industry, positioning it for growth and stability.
Zacks Rank & Stocks to Consider
Sunoco currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Williams Companies, Inc. (WMB - Free Report) is a premier energy infrastructure provider in North America. WMB has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days.
Williams Companies’ debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. WMB is also paying its shareholders an attractive dividend yielding around 5%. Beside these, the company has a share repurchase program worth $1.5 billion, highlighting its commitment to shareholders.
Enbridge Inc. (ENB - Free Report) has the longest and most advanced crude and liquid pipeline system in the world. ENB has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days.
Enbridge has a strong commitment to returning capital to shareholders. The company consistently outperforms the composite stocks within the oil energy sector by offering higher dividends. Over the majority of the last five years, ENB consistently yielded higher dividends than its sector counterparts.
Helix Energy Solutions Group, Inc. (HLX - Free Report) is an international offshore energy company that provides specialty services to the offshore energy industry, with a focus on their growing well intervention and robotics operations.
Helix Energy has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The Zacks Consensus Estimate for HLX’s earnings for 2023 and 2024 is pegged at 21 cents and 71 cents per share.