From Yahoo.ca Cenovus: A cyclical set for cash returns
Cenovus Energy (TSX:CVE) is not a typical stock pick for the long term. It is an energy stock. However, it appears to have some strong catalysts for the second half of the year and beyond.
Cenovus is one of Canada’s largest integrated energy companies. It has a mix of long-life oil assets that are complemented by a portfolio of refinery operations across North America.
The company is just hitting its stride with its refinery business after some tough years. Likewise, with oil sitting over US$80 per barrel, it is generating substantial free cash flow. Cenovus has been using that cash to reduce its long-term net debt target of $4 billion.
It is likely to hit this target in the back half of 2024. Once it does, it plans to return all its spare cash flow to shareholders.
Cenovus is known for its strong dividend growth, special dividends, and share buybacks. Shareholders could see some nice upside as they start to collect more income and value from this stock.
With a 2% dividend yield and a price-to-free cash flow ratio of 7.4 times, Cenovus looks like an attractive purchase today.