Cenovus Energy Inc's Dividend Analysis
Assessing the Sustainability and Growth of Cenovus Energy Inc's Dividends
Cenovus Energy Inc (NYSE:CVE) recently announced a dividend of $0.14 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-14. 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 look into Cenovus Energy Inc's dividend performance and assess its sustainability.
What Does Cenovus Energy Inc Do?
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Cenovus Energy Inc 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 2.14% and a 12-month forward dividend yield of 2.25%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Cenovus Energy Inc's annual dividend growth rate was 102.70%. Extended to a five-year horizon, this rate decreased to 23.90% per year. And over the past decade, Cenovus Energy Inc's annual dividends per share growth rate stands at -13.10%.
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 6.25%.
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 2023-12-31, Cenovus Energy Inc's dividend payout ratio is 0.24.
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 2023-12-31, suggesting fair profitability. The company has reported net profit in 7 years out of the 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 36.50% per year on average, a rate that outperforms approximately 84.8% of global competitors.
Engaging Conclusion
In conclusion, Cenovus Energy Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a comprehensive picture for value investors. With a consistent dividend history, a promising yield on cost, and a manageable payout ratio, Cenovus Energy Inc stands as a potentially attractive dividend-paying investment. However, investors should also consider the company's growth prospects and profitability rank when evaluating its long-term sustainability. Will Cenovus Energy Inc continue to satisfy income-focused investors with its dividend strategy? It's a question that warrants close monitoring of the company's future performance. For more detailed analysis and stock screening tools, GuruFocus Premium users can explore the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
