Cenovus (TSX:CVE) jumps as oil prices rise. An energy stock to buy?

Highlights

  • Cenovus stock has yielded 117.60 per cent in the past one year, likely boosted by the addition of Husky Energy assets in January 2021.
  • It is ranked high on the Toronto Stock Exchange for its high trading volume.
  • The company is set to pay quarterly dividend C$ 0.018 apiece on September 30.

The Canadian benchmark index saw its biggest percentage gain in two months on Wednesday, September 22, as energy stocks climbed nearly four per cent.

While the S&P/TSX composite index was up by 157.2 points at 20,401.05 on Wednesday, the S&P Capped Energy Index closed at 132.87 as energy shares were propelled by higher crude oil prices.

Cenovus Energy Inc (TSX:CVE) stood out among oil and gas stocks with a gain of 7.4 per cent to C$ 10.82 on Wednesday.

With energy stocks drawing this traction, here is a closer look at Cenovus Energy to understand its recent price performance and financial position.

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Cenovus Energy Inc (TSX:CVE) stock performance

Cenovus Energy, an integrated firm, develops, markets, and produces natural gas, crude oil and natural gas liquids (NGLs). In addition, it operates and owns refineries.

Cenovus Energy’s stock performance

The Calgary-based firm’s stock yielded 117.6 per cent in the past one year, likely boosted by addition of Husky Energy assets early this year.

Cenovus Energy stock also posted a 49.9 per cent year-to-date (YTD) growth, where it outperformed the market index’s surge of approximately 28 per cent.

Its 30-day relative strength index stood at 56.93 per cent, with a 30-day volatility of 45.17 per cent.

Cenovus is ranked high on the Toronto Stock Exchange for its high trading volume. The company is set to pay quarterly dividend C$ 0.018 apiece on September 30.

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Cenovus Energy recent financials

The energy firm reported net earnings of C$ 224 million in the second quarter of fiscal 2021, compared with a net loss of C$ 235 million Q2 2020. It also generated cash flow of C$1.4 billion from operating activities in the latest quarter.

In Q2 2021, the energy company reported a production of over 765,900 barrels of oil equivalent a day (boe/d), up by 65 per cent year-over-year (YoY).

Earlier in January 2021, Cenovus acquired Canada-based Husky Energy in an all-stock merger worth C$ 3.8 billion, including debt. With this acquisition, it reportedly became one of the largest refiners in Canada.

 

Bottom line

Cenovus said that it aims to reduce its net debt to C$ 10 billion by the end of 2021. Meanwhile, Cenovus kept its total working capital unchanged.

In September 2021, Cenovus Energy Inc and Suncor Energy Inc (TSX:SU), as part of the restructuring plan in the Terra Nova and White Rose projects, increased their individual stakes.

Cenovus presently holds 38 per cent stake in the Terra Nova offshore project (previously 13 per cent). Suncor Energy, on the other hand, holds a 48 per cent stake, while Murphy Oil (NYSE:MUR) owns 18 per cent interest.

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