CA - Cenovus Energy: Doubts Creep In

2024-06-16 07:20:28 ET

Summary

• The stock price took years to respond to the profitability improvements made after the acquisition of the ConocoPhillips Partnership interest.
• It is therefore not surprising that the stock has not responded to more cash available to return to shareholders in the near future, even after the 29% dividend increase.
• The refining business should show profitability growth both this fiscal year and for at least a couple more years.
• The Deep Basin properties are finally receiving capital that may represent an attempt to unlock the value there.
• The price/earnings ratio is very low for the growth history that has taken place since the ConocoPhillips Partnership buyout.

(Note: Cenovus Energy is a Canadian company listed on the NYSE that reports using Canadian dollars unless otherwise stated.)

Cenovus Energy ( CVE ) has made tremendous progress since I wrote an article on the great bargain that the purchase of the ConocoPhillips ( COP ) partnership interest. Back in 2017, cash flow in the years before the acquisition maybe hit C$1 billion in a good year. Now it does that more than quarterly....

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