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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 28.3% in the past six months compared with the industry’s 9.3% growth.
The Zacks Consensus Estimate for Sunoco’s 2024 earnings per share (EPS) is pegged at $3.83. SUN currently has a Zacks Style Score of B for Value and Growth.
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.
Strong Financial Performance: In the third quarter of 2023, Sunoco reported a substantial increase in net income, reaching $272 million from $83 million in the same period of 2022. This significant growth in profitability reflects the company's ability to effectively manage its operations and capitalize on favorable market conditions.
Growth in Fuel Sales Volume: The company reported selling 2.1 billion gallons of fuel in the third quarter of 2023, marking a 7% increase from the third quarter of 2022. This growth in volume indicates an expanding market presence and the ability to capture additional market share, potentially leading to sustained revenue growth.
Strategic Capital Expenditure: Sunoco's capital expenditure for the third quarter of 2023 was $45 million, of which $31 million was allocated for growth capital. This focus on growth-oriented investments demonstrates the company's commitment to expanding its operational capabilities and market reach, which could drive future growth.
Stable Distribution and Liquidity: The board of directors declared a stable distribution for the third quarter of 2023 at $0.8420 per unit. Additionally, the company maintained a liquidity of approximately $847 million at the end of the quarter. This financial stability, combined with a consistent distribution, makes Sunoco an attractive option for investors seeking steady income streams.
Merger Deal: Sunoco and NuStar Energy L.P. (NS - Free Report) have jointly announced a definitive merger agreement, wherein Sunoco will acquire NuStar in an all-stock transaction valued at $7.3 billion, inclusive of assumed debt. This acquisition is expected to bolster Sunoco's financial base, enhancing the partnership's credit standing and facilitating a growing distribution, while continuing its effective capital allocation strategy on a broader scale.
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.
Vaalco Energy (EGY - Free Report) is an independent energy company principally engaged in the acquisition, exploration, development, and production of crude oil and natural gas.
The Zacks Consensus Estimate for EGY’s 2024 EPS is pegged at $1.49. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days. EGY’s earnings for 2024 are expected to surge 325.7% year over year.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS is pegged at 89 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. EGY’s earnings for 2024 are expected to soar 242.3% year over year.
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Here's Why it is Worth Investing in Sunoco (SUN) Stock Now
Sunoco LP (SUN - Free Report) has gained 28.3% in the past six months compared with the industry’s 9.3% growth.
The Zacks Consensus Estimate for Sunoco’s 2024 earnings per share (EPS) is pegged at $3.83. SUN currently has a Zacks Style Score of B for Value and Growth.
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.
Strong Financial Performance: In the third quarter of 2023, Sunoco reported a substantial increase in net income, reaching $272 million from $83 million in the same period of 2022. This significant growth in profitability reflects the company's ability to effectively manage its operations and capitalize on favorable market conditions.
Growth in Fuel Sales Volume: The company reported selling 2.1 billion gallons of fuel in the third quarter of 2023, marking a 7% increase from the third quarter of 2022. This growth in volume indicates an expanding market presence and the ability to capture additional market share, potentially leading to sustained revenue growth.
Strategic Capital Expenditure: Sunoco's capital expenditure for the third quarter of 2023 was $45 million, of which $31 million was allocated for growth capital. This focus on growth-oriented investments demonstrates the company's commitment to expanding its operational capabilities and market reach, which could drive future growth.
Stable Distribution and Liquidity: The board of directors declared a stable distribution for the third quarter of 2023 at $0.8420 per unit. Additionally, the company maintained a liquidity of approximately $847 million at the end of the quarter. This financial stability, combined with a consistent distribution, makes Sunoco an attractive option for investors seeking steady income streams.
Merger Deal: Sunoco and NuStar Energy L.P. (NS - Free Report) have jointly announced a definitive merger agreement, wherein Sunoco will acquire NuStar in an all-stock transaction valued at $7.3 billion, inclusive of assumed debt. This acquisition is expected to bolster Sunoco's financial base, enhancing the partnership's credit standing and facilitating a growing distribution, while continuing its effective capital allocation strategy on a broader scale.
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 presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vaalco Energy (EGY - Free Report) is an independent energy company principally engaged in the acquisition, exploration, development, and production of crude oil and natural gas.
The Zacks Consensus Estimate for EGY’s 2024 EPS is pegged at $1.49. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days. EGY’s earnings for 2024 are expected to surge 325.7% year over year.
Subsea 7 S.A. (SUBCY - Free Report) helps build underwater oil and gas fields. It is a top player in the Oil and Gas Equipment and Services market, which is expected to grow as oil and gas production moves further offshore.
The Zacks Consensus Estimate for SUBCY’s 2024 EPS is pegged at 89 cents. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days. EGY’s earnings for 2024 are expected to soar 242.3% year over year.