Assessing the Dividend Performance of Cenovus Energy Inc
A Deep Dive into the Dividend History, Yield, and Growth of Cenovus Energy Inc (NYSE:CVE)
Cenovus Energy Inc (NYSE:CVE) recently announced a dividend of $0.14 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Cenovus Energy Inc's dividend performance and assess its sustainability.
What Does Cenovus Energy Inc Do?
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Cenovus Energy is an integrated oil company, focused on creating value through the development of its oil sands assets. The company also engages in production of conventional crude oil, natural gas liquids, and natural gas in Alberta, Canada, with refining operations in the U.S. Net upstream production averaged 786 thousand barrels of oil equivalent per day in 2022. The company had upstream projects across Western Canada; crude oil production and natural gas and NGLs production offshore China and Indonesia. The downstream operations include upgrading and refining operations in Canada and the U.S., and commercial fuel operations across Canada.
A Glimpse at Cenovus Energy Inc's Dividend History
Cenovus Energy Inc has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Cenovus Energy Inc's Dividend Yield and Growth
As of today, Cenovus Energy Inc currently has a 12-month trailing dividend yield of 1.69% and a 12-month forward dividend yield of 2.09%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Cenovus Energy Inc's annual dividend growth rate was 29.60%. Extended to a five-year horizon, this rate decreased to 1.50% per year. And over the past decade, Cenovus Energy Inc's annual dividends per share growth rate stands at -19.60%.
Based on Cenovus Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Cenovus Energy Inc stock as of today is approximately 1.82%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Cenovus Energy Inc's dividend payout ratio is 0.29.
Cenovus Energy Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cenovus Energy Inc's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Cenovus Energy Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Cenovus Energy Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Cenovus Energy Inc's revenue has increased by approximately 26.50% per year on average, a rate that outperforms than approximately 80.28% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Cenovus Energy Inc's earnings increased by approximately 21.50% per year on average, a rate that outperforms than approximately 49.71% of global competitors.
Conclusion
Overall, Cenovus Energy Inc has demonstrated a consistent dividend history with a promising yield. Despite a decline in the dividend growth rate over the past decade, recent years have seen a resurgence, indicating a positive outlook. The company's low payout ratio and fair profitability rank suggest a sustainable dividend policy. Moreover, the robust revenue and earnings growth rates underscore the company's strong growth prospects, further bolstering the sustainability of its dividends. Therefore, Cenovus Energy Inc appears to be a compelling choice for dividend investors.
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This article first appeared on GuruFocus.
