Veren Inc T.VRN

Potential catalysts for CPG going forward

[highalpha1]

CPG has several important catalysts that has the potential to raise its share price meaningfully in the coming months. Some of these catalysts can be applied generically to the energy sector, which I will not discuss here. However, there are also catalysts that are specific to CPG. Here are some of them:

1) Dividend hike -- While I think that rich dividends that CPG paid out in its heydey (when its payout was outspending cashflow) is long behind us, given the current paltry dividend of $0.0025/quarter, the company can easily increase it by, say, whopping 1200%, by issuing a $0.01/month dividend. You can do the math for yourself to determine what will be the dividend increase by percentage depending on how much you believe CPG management raises the dividend. I suspect that the dividend increase announcement will be made during Q3 earnings report, but maybe CPG management will surprise the market by announcing a dividend hike next month during Q2 earnings report.

2) Executing the current NCIB -- From my research, CPG has not yet executed on any part of the NCIB announced in March 2021. Given the relatively low volumes being traded n CPG recently, a modest execution of the NCIB could see a sharp rise in share price.

3) Q2 earnings report -- I have made this point before, I think that CPG management will announce better than expected output results during Q2 earnings report. That is, using the most recent projections guided by CPG management when it disposed some of its SE Saskatchewan assets (i.e., 128k to 132k boe/d), I think that Q2 earnings will show either that the company were are the high end of production expectations or outright exceeded it.

4) The D/CF and FCF numbers don't lie -- As CPG continues to lower the number for D/CF ratio and its FCF yield comes into focus, this will be one of the most attractive stocks for institutional investors interested in this sector (more on this in point 5 below).

5) Ample liquidity -- There are companies who have enticing D/CF and FCF metrics (e.g., CJ, GXE, TVE). However, CPG is regularly one of the most highly traded stocks on the TSX -- and usually THE most traded stock in the energy index. Having a share price that is highly liquid (unlike the companies I mentioned above), will make CPG relatively more attractive to institutional investors than others.

Good week so far. GLTA longs.

[CdnOilObserver]

I would agree with these points. FCF at the current WTI levels should be healthy enought to support a quarterly dividend of $0.03 per share, and initiate a meaningful NCIB. It is my opinion that the Canadian Energy Sector is selling at a steep discount to 2018 multiples.  This sector no longer is a growth story, like tech, it is a deep value story - and now it is nescessary to return

[LiquidOctopusV2]

Nailed it.  Very thorough.  

[Moernoney42]

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