Q: I'm trying to determine the risk of any potential future SU dividend cut going forward since they did it a few years ago. How does SU's balance sheet compare now to then ? Are there any other things that one can compare today to back in 2020 with this company?
5i Research Answer:
SU cut its dividend in May 2020, in the middle of the pandemic, and near when oil traded at a negative price. But it then doubled its dividend in late 2021 and the rate now is higher than it was before the cut (52c vs 46.5c). SU now has $5B less debt than in 2020 ($16B vs $21B) and cash flow is 4X what it was then ($13.6B vs $2.7B). Total assets are similar at $84B. Dividend payout now is less than 25% and we have few concerns on the dividend.