Don’t Miss the Long Haul; Ignore Volatility: Suncor Energy Inc. (SU), Exxon Mobil Corporation (XOM), Phillips 66 (PSX)

Page 1 of 2

Investing is a stressful activity. Daily price changes and quarterly earnings give enough information and activity to keep you glued to your computer all day. The energy markets are constantly filled with surprises and the latest doomsday story.

Suncor Energy Inc. (USA) (NYSE:SU)The chart below shows two different measures of volatility; one for oil, and one for the S&P 500. There have been huge spikes in volatility, yet the broad stock market has kept on growing. Over the past five years, the S&P 500 total return index is up 27.09%. The world needs a consistent supply of energy. Focusing on strong and secure energy firms gives investors a steady flow of profits without the stress of the news cycle.

^SPXTR data by YCharts

Where to Invest

If you want to invest for the long haul, then you need a company that thinks the same way. Exxon Mobil Corporation (NYSE:XOM) is one of the most powerful integrated oil companies — and with good reason. The company has a number of upstream projects, including the Kearl project in Canada’s oil sands. Replacing reserves is not easy for companies of this size, and in 2012, overall upstream volumes did decrease by 5.9% relative to 2011. At the same time, downstream earnings helped to even things out and improved margins increased earnings by $2.6 billion.

A good mix of downstream and upstream assets is critical to maintain earnings in the midst of volatile commodity prices. Exxon Mobil Corporation (NYSE:XOM)’s diversity helps to allow you, the investor, to sleep sounder. The company has almost no debt, with a total debt-to-equity ratio of 0.07. Its yield of 2.5% isn’t very large, but with a 22% payout ratio, the company is trying to be prudent and save enough for capital investment. ExxonMobil is a solid company with decades of experience. For long-term investors, it is a great firm to consider buying.

Suncor Energy Inc. (USA) (NYSE:SU) is a Canadian firm that is heavily involved in the oil sands. Currently the fourth stage of their Firebag project in the oil sands is being developed, which should provide some of the volume to boost total upstream production from Suncor’s current 549,000 barrels of oil equivalent per day to the 570,000 BOE/D – 620,000 BOE/D goal in 2013. Suncor’s also involved with Exxon’s Hebron project off the coast of Newfoundland. The majority of firms in the oilsands are forced to take steep discounts because of the lack of transportation to get heavy oil to refineries. Suncor’s company’s mix of upstream and downstream assets help to get good prices for their heavy oil.

The firm has a healthy debt load with a total debt to equity ratio of .26. Their profit margin of 12.3% and gross margin of 53.4% give the firm room to breathe. Suncor isn’t as famous as Exxon, though it is still a good company with diversified operations.

Page 1 of 2

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!