Energy stocks, especially those with exposure to oil and gas, aren't always the safest investments. They're often impacted heavily by commodity prices and that’s dangerous since they can wreak havoc on a company's earnings even though it may be doing all the right things.
But one stock has been able to generate strong results even amid a less-than-optimal environment is Suncor Energy Inc (TSX:SU)(NYSE:SU).
The Canadian energy giant has recorded an impressive $5-billion profit over the trailing 12 months on revenue of $37 billion. And the company has posted profits of more than $3 billion in 2018 and more than $4 billion in 2017.
Although the stock price is up a modest 7% in five years, the business remains strong and can be a safe way for investors to get some exposure to the oil and gas industry without taking on too much risk.
Investors will also get compensated with a strong 4% dividend yield that Suncor has increased over the years. Dividend payments of $0.42 have risen 45% from the $0.29 that the company was paying at the end of 2016.
The averages out to a compounded annual growth rate of over 13%, which is a stellar rate of increase. It means that at that rate, it would take five and a half years for the stock's dividend payments to double.
While there's no guarantee that Suncor will continue increasing its dividends at that rate, it's an indication of just how generous the company has been with its rate increases. For the dividend growth and the exposure to the oil and gas sector, Suncor could be a great stock to add to your portfolio today.
