Suncor Energy (NYSE:SU) vs. TXO Partners (NYSE:TXO) Critical Review

TXO Partners (NYSE:TXO) and Suncor Energy (NYSE:SU) are both energy companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, earnings, risk and profitability.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for TXO Partners and Suncor Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TXO Partners	1	0	2	2	3.00
Suncor Energy	0	2	7	3	3.08

TXO Partners presently has a consensus price target of $19.00, suggesting a potential upside of 32.96%. Suncor Energy has a consensus price target of $79.62, suggesting a potential upside of 10.28%. Given TXO Partners’ higher possible upside, analysts clearly believe TXO Partners is more favorable than Suncor Energy.

Insider and Institutional Ownership

27.4% of TXO Partners shares are held by institutional investors. Comparatively, 67.4% of Suncor Energy shares are held by institutional investors. 1.0% of Suncor Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

TXO Partners has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Suncor Energy has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Earnings & Valuation

This table compares TXO Partners and Suncor Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TXO Partners	$401.01 million	1.98	-$21.62 million	($0.77)	-18.56
Suncor Energy	$35.29 billion	2.39	$4.24 billion	$5.43	13.30

Suncor Energy has higher revenue and earnings than TXO Partners. TXO Partners is trading at a lower price-to-earnings ratio than Suncor Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TXO Partners and Suncor Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TXO Partners	-9.23%	-5.59%	-2.83%
Suncor Energy	15.62%	20.05%	10.06%

Dividends

TXO Partners pays an annual dividend of $1.60 per share and has a dividend yield of 11.2%. Suncor Energy pays an annual dividend of $1.73 per share and has a dividend yield of 2.4%. TXO Partners pays out -207.8% of its earnings in the form of a dividend. Suncor Energy pays out 31.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. TXO Partners has raised its dividend for 1 consecutive years and Suncor Energy has raised its dividend for 4 consecutive years. TXO Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Suncor Energy beats TXO Partners on 15 of the 18 factors compared between the two stocks.

About TXO Partners

TXO Partners, L.P., an oil and natural gas company, focuses on the acquisition, development, optimization, and exploitation of conventional oil, natural gas, and natural gas liquid reserves in North America. Its acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado. The company was formerly known as TXO Energy Partners, L.P. and changed its name to TXO Partners, L.P. in May 2023. TXO Partners, L.P. was incorporated in 2012 and is based in Fort Worth, Texas.

About Suncor Energy

Suncor Energy Inc. operates as an integrated energy company in Canada, the United States, and internationally. It operates through Oil Sands; Exploration and Production; and Refining and Marketing segments. The Oil Sands segment explores, develops, and produces bitumen, synthetic crude oil, and related products. This segment also engages in oil sands mining. The Exploration and Production segment is involved in offshore operations in the East Coast of Canada; and marketing and risk management of crude oil and natural gas. The Refining and Marketing segment engages in the refining of crude oil products; and distribution, marketing, transportation, and risk management of refined and petrochemical products, and other purchased products through the retail and wholesale networks. This segment is also involved in the trading of crude oil, refined products, natural gas, and power. The company was formerly known as Suncor Inc. and changed its name to Suncor Energy Inc. in April 1997. Suncor Energy Inc. was founded in 1917 and is headquartered in Calgary, Canada. Suncor Energy Inc.