CVE Stock Recent News

Cenovus (CVE) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.

Shares in Harland & Wolff Group (AIM:HARL) were winched up 15% to 13p after the Belfast shipbuilder said it has won a £61 million contract to upgrade the SeaRose floating production storage and offloading (FPSO) vessel. The Cenovus Energy, the Canadian oil giant, will deliver the FSPO vessel in in the first quarter of 2024, where is expected to remain in H&W's building dock for at least three months, with a peak of around 1,000 staff and contractors engaged in the work.

Cenovus Energy is a large integrated oil and gas producer in Canada with strong financial results and high dividend coverage ratios. The Series 3 preferred shares currently yield 6.1%, but the dividend rate will reset at the end of 2024. The Series 1 preferred shares currently yield 5.5% and could offer a yield of 10-12.5% starting in Q1 2026, based on assumptions of a 3-4.15% long-term bond yield.

Cenovus (CVE) remains dedicated to debt reduction through free cash flow generation and asset divestment.

Cenovus Energy's dividend yield has fallen since 2014 and is now nearing a 2% yield. The company's thermal business generates substantial cash flow, providing protection for cash flow even in scenarios where losses are incurred. Cenovus has a strong asset base with long reserve lives, but its valuation and lack of exposure to the LNG market pose risks.

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Cenovus Energy has undergone a turnaround and is now an attractive investment with efficient production, substantial oil reserves, and a focus on reducing debt. The company is expected to reach its net debt target by the end of the year, unlocking a wave of cash for shareholders. Recent outperformance, including a 20% return on NY-listed shares since May, suggests a positive future for CVE shares.

Cenovus, a Canadian tar sands producer, offers less to investors as compared to shale oil producers in the lower 48, including Chevron. Also, Cenovus does not have exposure to the fast-growing global and very profitable LNG market. Chevron does. Bottom line: Chevron has a superior asset base, a higher free cash flow yield, stronger dividend growth, and overall superior total returns.

Higher contributions from the Canadian Manufacturing unit and lower expenses aid Cenovus' (CVE) earnings in Q2.