SUN Investment Analysis Report & Stock Research, Sunoco, Inc.

Sunoco, Inc. (SUN)

SUN Stock Report

2-Year Price History

View Larger SUN Chart
NYSE:SUN
$29.79
(3/19 4:00PM)
-1.7%
Open$30.3 Mkt Cap$3.5 Billion
High$30.6 52Wk High$34.49
Low$29.39 52Wk Low$21.45
Volume3.7 Million Avg Vol 10D2.8 Million

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SUN Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at SUN through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 0.26x and 0.13x respectively.

Utilizing this range we can see that SUN’s current Price to Sales per share ratio of 0.11x is significantly below its average levels historically. In fact, with a current price of $29.72, SUN is a full 43% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for SUN.

SUN Cash Earnings

Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. SUN is significantly above its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for SUN to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 8.85 and a 4.46 low over the same period.

Therefore, at the current price of $29.72 and a Price to Cash Earnings ratio of 10.85, SUN is significantly overvalued. This diminishes the attractiveness of SUN until we see either a significant increase in cash earnings or a decline in price. A decline of the Price to Cash Earnings ratio of 62% is needed just to return to the historical cash earnings multiple.

SUN Dividends

While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.

In SUN’s case, the estimated annual dividend is $0.60 resulting in a current dividend yield of 2.02%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from SUN against the historic high and low levels over the past 10 years. The highest dividend yield from SUN over this period was 5.59% while the lowest dividend yield was 0.88% It is never a good sign for a company to pay significantly lower dividends, in this case 37.56% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.

Peer Comparison

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Sunoco, Inc. Industry Grouping

(3/18/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including SUN) 9.29 2.60 » 15.74 2.69 0.62 » 4.41 28.87% 17.75%
*10 year range does not include current year values
Baytex Energy Trust BTE $3.8 Billion $34.83 11.89 2.38 » 10.29 5.67 0.99 » 4.90 n/a 21.26%
NuStar Energy LP- Partnership Units NS $3.6 Billion $59.69 9.93 4.16 » 16.86 0.94 0.30 » 6.44 77.19% 8.36%
Sunoco, Inc. SUN $3.5 Billion $30.31 10.85 1.92 » 12.33 0.11 0.05 » 0.36 6.11% 31.42%
Oceaneering International, Inc. OII $3.5 Billion $63.68 11.41 3.11 » 17.24 1.95 0.49 » 2.71 18.49% 17.06%
Acergy SA ACGY $3.4 Billion $18.79 8.67 1.53 » 23.57 1.54 0.08 » 2.18 12.21% 29.74%
Pengrowth Energy Trust PGH $3.3 Billion $11.25 4.55 1.81 » 10.72 3.37 1.22 » 5.79 7.59% 12.32%
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12:51P, Mar. 11,2010 SUN $29.81 Sunoco, Inc.
Power Lunch

Income Investors: A Discussion of SUN and Dividends on Power Lunch

For income investors, dividend news is obviously important. SUN's dividends were discussed recently on Power Lunch.

Sunoco, Inc. receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; SUN has received less coverage from the financial media in business television and blogs.

“… raising targets and but some concerns about SUNOCO. Moving on to the auction. Moments away. Patty edwards, how are you setting up? …”

10:59A, Mar. 11,2010 SUN $29.86 Sunoco, Inc.
Squawk On The Street

SUN and Analysts' Opinion Discussed on Squawk On The Street

When the television or blog talks about an analysts' opinion it could have a major impact on the stock.

Sunoco, Inc. receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; SUN has received less coverage from the financial media in business television and blogs. The latest news on SUN has created quite a stir as the stock is trading $1.46 higher in today's session.

“… SUNOCO, this is not the packaging company, this is the refinery. From the sell list at goldman who boosted the price target from 27 to 20. …”

5:37P, Mar. 10,2010 SUN $29.75 Sunoco, Inc.
Fast Money

News Developing on Fast Money for SUN

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Sunoco, Inc..

Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on SUN because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Sunoco, Inc. has actually sunk a bit in comparison to the others.

“… Take a look at SUNOCO. It's a name you can own. Why? It's on the goldman sachs conviction sell list. So as the stock begins to rise you would expect that they would probably ... …”

11:40A, Mar. 05,2010 SUN $28.89 Sunoco, Inc.
InBusiness With Margaret Brennan and Francine Lacqua

Sunoco, Inc. EPS: A Hot Topic on InBusiness With Margaret Brennan and Francine Lacqua

Whenever a reliable source like InBusiness With Margaret Brennan and Francine Lacqua talks about earnings or news on earnings, we think it warrants bringing attention to it.

The Motley Fool CAPS data suggests that investors believe Sunoco, Inc. will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, SUN has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on SUN.

“… That is the double digits in the last little bit of the last one is SUNOCO. Look at crack spreads, raising which is good. …”

5:28P, Mar. 04,2010 SUN $28.47 Sunoco, Inc.
Fast Money

SUN Back in the News on Fast Money

There has not been much to report from SUN in the last few weeks at least, but Fast Money talked about the stock recently.

The Ockham valuation currently has a Fairly Valued stance on SUN because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Sunoco, Inc. has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… If you look at SUNOCO and tesoro, tso. They've been paradigmed to price in crack spreads. These stocks are trading at 1/5 where they were and they have not come back. …”

12:04P, Jan. 05,2010 SUN $28.20 Sunoco, Inc.
Power Lunch

Sunoco, Inc. News is Being Covered Right Now on Power Lunch

The latest news on Power Lunch in regards to SUN came through on RazorWire recently.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Sunoco, Inc. has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on SUN because it trades within the price range that we would expect given current market conditions and fundamentals. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards SUN and think that it will generally perform in-line with the S&P 500.

“… You do have the SUNOCO facility in philadelphia that's been off line for a couple of days and that may be leading to some of the heating oil futures are being closely watched as ... …”

5:53P, Dec. 30,2009 SUN $26.07 Sunoco, Inc.
Fast Money

Fast Money Brings News Related to Sunoco, Inc.

The latest news from Fast Money on SUN is available through Ockham's news analytics platform RazorWire.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, SUN has been less covered in the news compared to the rest of our universe of stocks. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Sunoco, Inc. will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on SUN.

“… refiners have had a tough year but SUNOCO up 2%. > > in any trade you need a point of reference. > > dell pop tleeg%, brian. > > …”

12:53P, Dec. 23,2009 SUN $25.62 Sunoco, Inc.
Power Lunch

The Latest News for SUN Was Just on Power Lunch

As always, the latest news on SUN is available to Ockham clients through RazorWire, and it was mentioned recently on Power Lunch.

The Ockham valuation currently has a Fairly Valued stance on SUN because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Sunoco, Inc. has actually sunk a bit in comparison to the others. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards SUN and think that it will generally perform in-line with the S&P 500.

“… I would think the tradeoff might be to look at SUNOCO, frontier, holly corp, three good famous right now. > > do you like nat gas better? That's also tradesing higher > > …”

8:16A, Dec. 14,2009 SUN $26.25 Sunoco, Inc.
Imus In The Morning

News on SUN From the Pundits on Imus In The Morning

As always, the latest news on SUN is available to Ockham clients through RazorWire, and it was mentioned recently on Imus In The Morning.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, SUN has been less covered in the news compared to the rest of our universe of stocks. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Sunoco, Inc. will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on SUN.

“… Imus: I usually buy SUNOCO. Dagen: there you go. Which is the sponsor of nascar, the official fuel of nascar. Dagen: well, you all were talking about just to pick up on what ... …”

9:42A, Dec. 04,2009 SUN $25.95 Sunoco, Inc.
The Opening Bell on Fox Business

Holding SUN Stock? See What Is Being Discussed on The Opening Bell on Fox Business

As always, the latest news on SUN is available to Ockham clients through RazorWire, and it was mentioned recently on The Opening Bell on Fox Business.

When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Sunoco, Inc. has been talked about more than normal recently. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Sunoco, Inc. will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on SUN.

“… The stock up almost 5% on the news and SUNOCO products getting a boost after the packaging company raised its product target for the fourth quarter. The stock is up 3. …”

View All Sunoco, Inc. Stock News

Key Fundamentals

SUN - Sunoco, Inc. Fundamentals
Price (3/19 4:00PM) $29.79
Volume (3/19 4:00PM) 3.7 Million
Last Close Price $30.31
10 Day Average Volume 2.8 Million
13 Week Price Range $24.64 - $30.98
52 Week Price Range $21.45 - $34.49
LTM Revenue $31.2 Billion
 
Shares Outstanding (12/2009) 116.9 Million
Market Capitalization $3.5 Billion
Shares Held By Institutions 99.1 Million
Institutional Holders 479
% Shares Held By Institutions 84.80%
Earnings Per Share (EPS) ($2.81)
P/E Ratio n/a
Book Value Per Share $21.86
 
Gross Margin 12.30%
Annual Dividend 0.60
Dividend Yield 2.00%
Beta 0.63
Fiscal Year Ends December

About Sunoco, Inc.

Sunoco, Inc. is considered to operate in the Basic Materials sector. They specifically operate in the Oil & Gas Refining/Marketing business segment contained within the Energy industry.

The Company, through its subsidiaries, is a petroleum refiner and marketer and chemicals manufacturer with interests in logistics and cokemaking.