CVE - Cenovus Energy: Calling All Dividend Investors

2024-02-16 11:23:46 ET

Summary

• Cenovus Energy Inc. has reduced debt by over C$900 million in the latest quarter. It will not be long before the company hits the net debt goal of $4 billion.
• The company's refining abilities insulate a lot of production from thermal oil pricing discounts, allowing for more cash flow in the future.
• Once the net debt reaches C$4 billion, the company plans to double the free cash flow available to shareholders, potentially leading to significant dividend increases.
• Management also has projects to grow the business in the future which would lead to more dividend increases.
• Thermal companies tend to cash flow exceedingly well even at low commodity price levels due to the large upfront costs that create depreciation to help cover later cash flows.

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