May 25, 2022

Cenovus Energy Inc (CVE)



Cenovus Energy Inc. (CVE) is another Canadian giant in the oil and gas energy.  While Cenovus itself was only formed very recently (November 30, 2009) as a spinoff from the natural gas conglomerate Encana Corporation, the history of the overall company can be traced back to the 1880’s and exploration of Canada.  When the Canadian Government gave the Canadian Pacific Railway (CPR) land rights to build the first railroad across Canada, these included the mineral rights in many cases.  Of course these mineral rights would later become very valuable when it was determined that much of the land lay on top of oil-rich land in western Canada.  Cenovus (CVE) is essentially all of the oil assets that Encana used to own, and the original parent company is now extremely focused on the natural gas sector.  The two major companies that joined together to form Encana back in 2002 were the PanCanadian Energy Corporation and the Alberta Energy Company.  Cenovus has retained many of these original assets from two of the world’s oldest energy companies.


Cenovus (CVE) is focused on, “Applying fresh, progressive thinking to safely and responsibly unlock energy resources the world needs.”  The company has operations all over western Canada, including northern Alberta and southern Saskatchewan.  While Cenovus obviously has substantial exploration and extraction capability, they are very multidimensional in that they also boast considerable refining capacity as well through a 50% ownership stake in two American refineries.  This vertical integration is key to their efficiency strategy.  Cenovus (CVE) employs more than 3,500 people.  They have a pretty good track record in such areas as innovation, safety, low-cost efficiency, and solid management.  The large amount of property under ownership and the large-scale diversity that Cenovus (CVE) brings to the table make it very attractive to long-term investors.


The two major income-producing properties for the company are their oil sands holdings at Foster Creek and Christina Lake.  They are located in the wealthy Athabasca Region in northeastern Alberta.  These two projects, along with a few other smaller properties, constitute 1.4 million acres in northern Alberta alone.  More recently, Cenovus has expanded its production near the Weyburn oil field in Saskatchewan.


Shares of Cenovus (CVE) recently closed at around $34.00.  This is near their 52-week high of $38.98 and is relative to a 52-week low of $28.85.  In terms of market capitalization, Cenovus is a huge company with a cap number of almost $26 billion.  It’s most recent Earnings-per-Share was 1.71.  At the $34.00 mark, the company has a Price-to-Earnings ratio of around $20.  Its annual dividend of $0.81 gives it a yield of 2.4%.  While Cenovus (CVE) has substantial assets, and looks to be poised for considerable growth, this price point is just too high for me.  That is a very low yield number relative to much of the rest of Canada’s energy companies, and it could easily be argued that Cenovus’ old partner – Encana – has much more room to grow given its natural gas concentration.  Overall, it is definitely a well-diversified energy company (I especially like the refining capacity) however, I would wait for shares to drop a little closer to the $30 level before looking at taking a large position.


Cenovus (CVE) Technical Analysis:

CVE trend analysis

CVE is trading on a uptrend, click here to get your free trend analysis on CVE.


Cenovus (CVE) Stock Graph:


Cenovus (CVE) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
CVECenovus Energy Inc32.92.4360.520.1507045N/A93.09678