Intrinsic value of Sunoco - SUN

Previous Close

$28.08

  Intrinsic Value

$20.79

stock screener

  Rating & Target

sell

-26%

Previous close

$28.08

 
Intrinsic value

$20.79

 
Up/down potential

-26%

 
Rating

sell

We calculate the intrinsic value of SUN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  59.30
  53.87
  48.98
  44.58
  40.63
  37.06
  33.86
  30.97
  28.37
  26.04
  23.93
  22.04
  20.34
  18.80
  17.42
  16.18
  15.06
  14.06
  13.15
  12.34
  11.60
  10.94
  10.35
  9.81
  9.33
  8.90
  8.51
  8.16
  7.84
  7.56
Revenue, $m
  18,675
  28,735
  42,810
  61,897
  87,043
  119,304
  159,697
  209,158
  268,505
  338,416
  419,410
  511,848
  615,937
  731,747
  859,233
  998,255
  1,148,612
  1,310,057
  1,482,332
  1,665,179
  1,858,367
  2,061,699
  2,275,029
  2,498,268
  2,731,390
  2,974,434
  3,227,509
  3,490,794
  3,764,535
  4,049,043
Variable operating expenses, $m
  17,648
  27,037
  40,172
  57,985
  81,453
  111,561
  149,258
  195,417
  250,803
  316,047
  391,415
  477,682
  574,823
  682,903
  801,879
  931,622
  1,071,942
  1,222,612
  1,383,387
  1,554,029
  1,734,322
  1,924,082
  2,123,172
  2,331,510
  2,549,071
  2,775,892
  3,012,075
  3,257,786
  3,513,254
  3,778,772
Fixed operating expenses, $m
  353
  360
  368
  376
  385
  393
  402
  411
  420
  429
  438
  448
  458
  468
  478
  489
  499
  510
  522
  533
  545
  557
  569
  582
  594
  607
  621
  635
  648
  663
Total operating expenses, $m
  18,001
  27,397
  40,540
  58,361
  81,838
  111,954
  149,660
  195,828
  251,223
  316,476
  391,853
  478,130
  575,281
  683,371
  802,357
  932,111
  1,072,441
  1,223,122
  1,383,909
  1,554,562
  1,734,867
  1,924,639
  2,123,741
  2,332,092
  2,549,665
  2,776,499
  3,012,696
  3,258,421
  3,513,902
  3,779,435
Operating income, $m
  674
  1,338
  2,269
  3,535
  5,206
  7,351
  10,038
  13,331
  17,283
  21,940
  27,557
  33,718
  40,656
  48,376
  56,875
  66,144
  76,170
  86,935
  98,423
  110,617
  123,500
  137,060
  151,288
  166,176
  181,724
  197,934
  214,814
  232,374
  250,632
  269,609
EBITDA, $m
  1,083
  1,849
  2,923
  4,382
  6,307
  8,779
  11,876
  15,670
  20,223
  25,589
  31,807
  38,904
  46,896
  55,790
  65,581
  76,259
  87,808
  100,209
  113,442
  127,489
  142,329
  157,950
  174,339
  191,489
  209,399
  228,072
  247,515
  267,743
  288,775
  310,634
Interest expense (income), $m
  188
  232
  427
  710
  1,105
  1,641
  2,348
  3,254
  4,389
  5,779
  7,446
  9,410
  11,686
  14,283
  17,207
  20,461
  24,043
  27,949
  32,173
  36,709
  41,549
  46,686
  52,114
  57,827
  63,820
  70,092
  76,642
  83,470
  90,581
  97,978
  105,668
Earnings before tax, $m
  442
  911
  1,560
  2,430
  3,564
  5,003
  6,784
  8,942
  11,504
  14,494
  18,147
  22,032
  26,373
  31,168
  36,414
  42,101
  48,221
  54,762
  61,714
  69,068
  76,814
  84,947
  93,461
  102,356
  111,632
  121,293
  131,343
  141,794
  152,655
  163,940
Tax expense, $m
  119
  246
  421
  656
  962
  1,351
  1,832
  2,414
  3,106
  3,913
  4,900
  5,949
  7,121
  8,415
  9,832
  11,367
  13,020
  14,786
  16,663
  18,648
  20,740
  22,936
  25,235
  27,636
  30,141
  32,749
  35,463
  38,284
  41,217
  44,264
Net income, $m
  323
  665
  1,139
  1,774
  2,602
  3,652
  4,952
  6,527
  8,398
  10,581
  13,247
  16,083
  19,252
  22,753
  26,582
  30,734
  35,201
  39,976
  45,051
  50,419
  56,074
  62,011
  68,227
  74,720
  81,491
  88,544
  95,881
  103,509
  111,438
  119,676

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  13,292
  20,452
  30,470
  44,055
  61,952
  84,914
  113,664
  148,867
  191,107
  240,866
  298,512
  364,304
  438,389
  520,816
  611,553
  710,502
  817,517
  932,425
  1,055,040
  1,185,181
  1,322,681
  1,467,401
  1,619,238
  1,778,127
  1,944,049
  2,117,035
  2,297,160
  2,484,551
  2,679,384
  2,881,881
Adjusted assets (=assets-cash), $m
  13,292
  20,452
  30,470
  44,055
  61,952
  84,914
  113,664
  148,867
  191,107
  240,866
  298,512
  364,304
  438,389
  520,816
  611,553
  710,502
  817,517
  932,425
  1,055,040
  1,185,181
  1,322,681
  1,467,401
  1,619,238
  1,778,127
  1,944,049
  2,117,035
  2,297,160
  2,484,551
  2,679,384
  2,881,881
Revenue / Adjusted assets
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
  1.405
Average production assets, $m
  4,295
  6,609
  9,846
  14,236
  20,020
  27,440
  36,730
  48,106
  61,756
  77,836
  96,464
  117,725
  141,665
  168,302
  197,623
  229,599
  264,181
  301,313
  340,936
  382,991
  427,424
  474,191
  523,257
  574,602
  628,220
  684,120
  742,327
  802,883
  865,843
  931,280
Working capital, $m
  5,266
  8,103
  12,072
  17,455
  24,546
  33,644
  45,035
  58,983
  75,719
  95,433
  118,274
  144,341
  173,694
  206,353
  242,304
  281,508
  323,909
  369,436
  418,018
  469,580
  524,059
  581,399
  641,558
  704,512
  770,252
  838,790
  910,158
  984,404
  1,061,599
  1,141,830
Total debt, $m
  7,909
  13,143
  20,466
  30,397
  43,480
  60,265
  81,281
  107,015
  137,892
  174,266
  216,406
  264,499
  318,655
  378,910
  445,239
  517,570
  595,798
  679,796
  769,427
  864,560
  965,073
  1,070,863
  1,181,856
  1,298,004
  1,419,293
  1,545,745
  1,677,417
  1,814,400
  1,956,823
  2,104,848
Total liabilities, $m
  9,716
  14,950
  22,273
  32,204
  45,287
  62,072
  83,088
  108,822
  139,699
  176,073
  218,213
  266,306
  320,462
  380,717
  447,046
  519,377
  597,605
  681,603
  771,234
  866,367
  966,880
  1,072,670
  1,183,663
  1,299,811
  1,421,100
  1,547,552
  1,679,224
  1,816,207
  1,958,630
  2,106,655
Total equity, $m
  3,575
  5,502
  8,196
  11,851
  16,665
  22,842
  30,576
  40,045
  51,408
  64,793
  80,300
  97,998
  117,927
  140,100
  164,508
  191,125
  219,912
  250,822
  283,806
  318,814
  355,801
  394,731
  435,575
  478,316
  522,949
  569,482
  617,936
  668,344
  720,754
  775,226
Total liabilities and equity, $m
  13,291
  20,452
  30,469
  44,055
  61,952
  84,914
  113,664
  148,867
  191,107
  240,866
  298,513
  364,304
  438,389
  520,817
  611,554
  710,502
  817,517
  932,425
  1,055,040
  1,185,181
  1,322,681
  1,467,401
  1,619,238
  1,778,127
  1,944,049
  2,117,034
  2,297,160
  2,484,551
  2,679,384
  2,881,881
Debt-to-equity ratio
  2.210
  2.390
  2.500
  2.560
  2.610
  2.640
  2.660
  2.670
  2.680
  2.690
  2.690
  2.700
  2.700
  2.700
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.710
  2.720
Adjusted equity ratio
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  323
  665
  1,139
  1,774
  2,602
  3,652
  4,952
  6,527
  8,398
  10,581
  13,247
  16,083
  19,252
  22,753
  26,582
  30,734
  35,201
  39,976
  45,051
  50,419
  56,074
  62,011
  68,227
  74,720
  81,491
  88,544
  95,881
  103,509
  111,438
  119,676
Depreciation, amort., depletion, $m
  409
  511
  654
  847
  1,102
  1,429
  1,838
  2,339
  2,940
  3,649
  4,250
  5,186
  6,241
  7,414
  8,706
  10,114
  11,638
  13,274
  15,019
  16,872
  18,829
  20,889
  23,051
  25,313
  27,675
  30,137
  32,702
  35,369
  38,143
  41,026
Funds from operations, $m
  732
  1,176
  1,792
  2,621
  3,704
  5,081
  6,790
  8,866
  11,339
  14,229
  17,497
  21,269
  25,493
  30,167
  35,288
  40,849
  46,839
  53,250
  60,071
  67,291
  74,903
  82,900
  91,278
  100,033
  109,166
  118,681
  128,582
  138,879
  149,581
  160,702
Change in working capital, $m
  1,960
  2,837
  3,969
  5,382
  7,091
  9,098
  11,391
  13,948
  16,736
  19,715
  22,840
  26,067
  29,353
  32,659
  35,951
  39,204
  42,400
  45,528
  48,581
  51,563
  54,479
  57,340
  60,159
  62,953
  65,740
  68,538
  71,367
  74,246
  77,195
  80,231
Cash from operations, $m
  -1,228
  -1,661
  -2,177
  -2,761
  -3,388
  -4,017
  -4,601
  -5,082
  -5,397
  -5,485
  -5,344
  -4,798
  -3,860
  -2,491
  -663
  1,644
  4,439
  7,722
  11,489
  15,728
  20,424
  25,561
  31,119
  37,080
  43,426
  50,143
  57,215
  64,632
  72,386
  80,471
Maintenance CAPEX, $m
  -119
  -189
  -291
  -434
  -627
  -882
  -1,209
  -1,618
  -2,119
  -2,721
  -3,429
  -4,250
  -5,186
  -6,241
  -7,414
  -8,706
  -10,114
  -11,638
  -13,274
  -15,019
  -16,872
  -18,829
  -20,889
  -23,051
  -25,313
  -27,675
  -30,137
  -32,702
  -35,369
  -38,143
New CAPEX, $m
  -1,594
  -2,314
  -3,237
  -4,390
  -5,784
  -7,420
  -9,290
  -11,376
  -13,650
  -16,079
  -18,629
  -21,261
  -23,940
  -26,636
  -29,322
  -31,975
  -34,582
  -37,132
  -39,623
  -42,055
  -44,433
  -46,766
  -49,066
  -51,345
  -53,618
  -55,900
  -58,207
  -60,556
  -62,960
  -65,437
Cash from investing activities, $m
  -1,713
  -2,503
  -3,528
  -4,824
  -6,411
  -8,302
  -10,499
  -12,994
  -15,769
  -18,800
  -22,058
  -25,511
  -29,126
  -32,877
  -36,736
  -40,681
  -44,696
  -48,770
  -52,897
  -57,074
  -61,305
  -65,595
  -69,955
  -74,396
  -78,931
  -83,575
  -88,344
  -93,258
  -98,329
  -103,580
Free cash flow, $m
  -2,941
  -4,164
  -5,705
  -7,585
  -9,798
  -12,319
  -15,100
  -18,076
  -21,167
  -24,285
  -27,401
  -30,308
  -32,987
  -35,369
  -37,399
  -39,037
  -40,258
  -41,048
  -41,408
  -41,346
  -40,881
  -40,035
  -38,837
  -37,316
  -35,505
  -33,432
  -31,130
  -28,625
  -25,944
  -23,109
Issuance/(repayment) of debt, $m
  3,619
  5,234
  7,323
  9,931
  13,083
  16,785
  21,016
  25,734
  30,877
  36,373
  42,140
  48,094
  54,156
  60,254
  66,329
  72,331
  78,228
  83,998
  89,632
  95,133
  100,513
  105,791
  110,992
  116,148
  121,289
  126,452
  131,671
  136,983
  142,423
  148,025
Issuance/(repurchase) of shares, $m
  1,005
  1,261
  1,556
  1,880
  2,213
  2,525
  2,781
  2,942
  2,964
  2,804
  2,260
  1,615
  677
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  4,624
  6,495
  8,879
  11,811
  15,296
  19,310
  23,797
  28,676
  33,841
  39,177
  44,400
  49,709
  54,833
  60,254
  66,329
  72,331
  78,228
  83,998
  89,632
  95,133
  100,513
  105,791
  110,992
  116,148
  121,289
  126,452
  131,671
  136,983
  142,423
  148,025
Total cash flow (excl. dividends), $m
  1,683
  2,331
  3,174
  4,226
  5,497
  6,991
  8,697
  10,600
  12,675
  14,892
  16,999
  19,400
  21,846
  24,886
  28,930
  33,294
  37,970
  42,950
  48,224
  53,787
  59,632
  65,756
  72,156
  78,831
  85,785
  93,020
  100,542
  108,358
  116,479
  124,916
Retained Cash Flow (-), $m
  -1,328
  -1,926
  -2,695
  -3,654
  -4,814
  -6,177
  -7,734
  -9,470
  -11,363
  -13,385
  -15,507
  -17,698
  -19,929
  -22,173
  -24,408
  -26,617
  -28,787
  -30,910
  -32,983
  -35,008
  -36,988
  -38,930
  -40,844
  -42,741
  -44,633
  -46,533
  -48,454
  -50,408
  -52,410
  -54,472
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  355
  405
  479
  571
  683
  814
  964
  1,131
  1,313
  1,507
  1,492
  1,702
  1,917
  2,713
  4,522
  6,677
  9,183
  12,039
  15,241
  18,779
  22,645
  26,826
  31,312
  36,090
  41,152
  46,487
  52,088
  57,950
  64,069
  70,444
Discount rate, %
  10.00
  10.50
  11.03
  11.58
  12.16
  12.76
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.07
  25.27
  26.53
  27.86
  29.25
  30.72
  32.25
  33.86
  35.56
  37.33
  39.20
  41.16
PV of cash for distribution, $m
  323
  332
  350
  369
  385
  396
  400
  394
  380
  356
  284
  256
  224
  242
  301
  325
  320
  293
  253
  207
  162
  120
  86
  58
  38
  24
  14
  8
  4
  2
Current shareholders' claim on cash, %
  69.7
  52.0
  40.8
  33.4
  28.2
  24.6
  22.0
  20.1
  18.8
  17.8
  17.3
  16.9
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8
  16.8

Sunoco LP is engaged in the retail sale of motor fuels and merchandise through its Company-operated convenience stores and retail fuel sites, as well as the wholesale distribution of motor fuels to convenience stores, independent dealers, commercial customers and distributors. The Company operates through two segments: wholesale and retail. The Wholesale segment sells motor fuel to its retail segment and external customers. The Retail segment operates convenience stores selling a range of merchandise, food items, services and motor fuel. As of December 31, 2016, the Company operated approximately 1,345 convenience stores and fuel outlets in over 20 states, offering merchandise, food service, motor fuel and other services.

FINANCIAL RATIOS  of  Sunoco (SUN)

Valuation Ratios
P/E Ratio -7.5
Price to Sales 0.2
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 5.4
Price to Free Cash Flow 42.8
Growth Rates
Sales Growth Rate -15%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -11.2%
Cap. Spend. - 3 Yr. Gr. Rate 33.4%
Financial Strength
Quick Ratio 24
Current Ratio 0.3
LT Debt to Equity 205.3%
Total Debt to Equity 205.6%
Interest Coverage -1
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. 0.4%
Return On Total Capital -5.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0.7%
Return On Equity -10.9%
Return On Equity - 3 Yr. Avg. -2%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 14.1%
Gross Margin - 3 Yr. Avg. 9.4%
EBITDA Margin 0.4%
EBITDA Margin - 3 Yr. Avg. 1.8%
Operating Margin -1.6%
Oper. Margin - 3 Yr. Avg. 0.5%
Pre-Tax Margin -2.8%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin -2.6%
Net Profit Margin - 3 Yr. Avg. -0.4%
Effective Tax Rate 7.1%
Eff/ Tax Rate - 3 Yr. Avg. 10.5%
Payout Ratio -107.4%

SUN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SUN stock intrinsic value calculation we used $11723 million for the last fiscal year's total revenue generated by Sunoco. The default revenue input number comes from 0001 income statement of Sunoco. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SUN stock valuation model: a) initial revenue growth rate of 59.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10%, whose default value for SUN is calculated based on our internal credit rating of Sunoco, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Sunoco.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SUN stock the variable cost ratio is equal to 95.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $345 million in the base year in the intrinsic value calculation for SUN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Sunoco.

Corporate tax rate of 27% is the nominal tax rate for Sunoco. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SUN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SUN are equal to 23%.

Life of production assets of 22.7 years is the average useful life of capital assets used in Sunoco operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SUN is equal to 28.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2247 million for Sunoco - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 82.504 million for Sunoco is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Sunoco at the current share price and the inputted number of shares is $2.3 billion.

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COMPANY NEWS

▶ Houston midstream co. to sell refined products terminals to Sunoco   [Nov-15-18 08:33AM  American City Business Journals]
▶ This High-Yield Stock Seems to Have Found Its Footing   [Nov-13-18 06:06AM  Motley Fool]
▶ Sunoco LP: 3Q Earnings Snapshot   [Nov-07-18 07:47PM  Associated Press]
▶ Sunoco's Q3 Earnings Preview   [07:29AM  Benzinga]
▶ Sunoco LP Maintains Quarterly Distribution   [Oct-26-18 05:26PM  PR Newswire]
▶ Canadian Energy Stocks Slide Amid Wide Pricing Differential   [Oct-05-18 03:52PM  TheStreet.com]
▶ Is Sunoco LP a Buy?   [Sep-19-18 06:05AM  Motley Fool]
▶ Danger Lurks for These 3 High-Yield Dividend Stocks   [Aug-30-18 12:06PM  Motley Fool]
▶ Sunoco LP to Host Earnings Call   [08:30AM  ACCESSWIRE]
▶ Sunoco LP: 2Q Earnings Snapshot   [05:53PM  Associated Press]
▶ Energy Transfer Equity LP Earnings: What to Watch in Q2   [Aug-06-18 03:00PM  Motley Fool]
▶ Is Sunoco LP a Yield Trap?   [08:51AM  Motley Fool]
▶ Jefferies Issues MLP Update With New Franchise Pick   [Jul-22-18 05:00PM  Benzinga]
▶ Who Really Owns Suntech SA. (WSE:SUN)?   [May-22-18 11:27AM  Simply Wall St.]
▶ Sunoco LP: 1Q Earnings Snapshot   [May-09-18 06:48PM  Associated Press]
▶ Sunoco LP Maintains Quarterly Distribution   [Apr-26-18 04:30PM  PR Newswire]
▶ 7-Eleven makes real estate buys from Sunoco to expand presence in region   [Apr-25-18 01:56PM  American City Business Journals]
▶ What You Must Know About Suntech SA.s (WSE:SUN) 13.36% ROE   [Mar-15-18 03:06AM  Simply Wall St.]
▶ Sunoco LP to Host Earnings Call   [09:00AM  ACCESSWIRE]
▶ The Latest: Sunoco says deal will avoid pipeline litigation   [Feb-08-18 02:15PM  Associated Press]
▶ Will 2018 Be Sunoco LP's Best Year Yet?   [Feb-06-18 09:48AM  Motley Fool]
▶ Why 2017 Was a Year to Forget for Sunoco LP   [Feb-05-18 07:36AM  Motley Fool]
▶ Sunoco LP Announces 4Q 2017 Earnings Release Dates   [Jan-31-18 04:30PM  PR Newswire]
▶ 7-Eleven completes $3.3B purchase after agreeing to divest stores   [Jan-25-18 02:15PM  American City Business Journals]

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