CVE and TRP: Are these 2 large-cap energy stocks a buy for August?

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CVE and TRP: Are these 2 large-cap energy stocks a buy for August?

 CVE and TRP: Are these 2 large-cap energy stocks a buy for August?
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Highlights

  • The energy index gained over 38 per cent year-to-date
  • CVE stock catapulted by nearly 130 per cent in 12 months
  • TC Energy said that it will deliver a quarterly dividend of 0.90 on October 31

Income investors could explore TSX energy stocks like Cenovus Energy (TSX: CVE) and TC Energy (TSX: TRP) as these large-cap companies announced quarterly dividends along with their Q2 2022 financial results on Thursday, July 28.

Crude prices were hovering over US$ 98.7 while brent was trading around US$ 104 at 7.32 AM EST on July 29. Although oil prices are currently in the green, market volatility can prevail in the face of growing economic concerns caused by inflation and recession fear.

But notably, the energy index seems to have recovered slightly, with a year-to-date (YTD) gain of over 38 per cent. On that note, let us explore these dividend-paying energy stocks and look at their latest quarter’s financial results.

Cenovus Energy Inc (TSX: CVE)

Cenovus Energy said that its cash flow from operating activities increased by 118 per cent to C$ 2.97 billion in Q2 2022 compared to C$ 1.36 billion in Q2 2021. The large-cap energy producer reported a year-over-year (YoY) rise of 77 per cent to C$ 2.27 billion in its free funds flow for the quarter that ended on June 30, 2022.

Cenovus saw a triple-digit growth of 986 per cent in its net income to C$ 2.43 billion in the latest quarter. In addition, the oil company declared a quarterly dividend of C$ 0.105 to be paid on September 29.

The CVE stock catapulted by nearly 130 per cent in 12 months. As per Refinitiv findings, CVE stocks held a Relative Strength Index (RSI) of 50.02 at the time of writing on July 28, which depicts a moderate trend.

CVE and TRP: Are these 2 large-cap energy stocks a buy right now?

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TC Energy Corporation (TSX: TRP)

TC Energy, while announcing its Q2 2022 results on July 28, stated that it inked a revised agreement for the Coastal Gaslink project with LNG Canada. The pipeline company also said that it would deliver a quarterly dividend of 0.90 on October 31.

The C$ 68 billion-market cap company said that its net profit attributable to shareholders dropped to C$ 889 million in Q2 2022 compared to C$ 975 million in Q2 2021. However, on a YTD basis, TC Energy improved its net profit to C$ 1.24 billion for the six months ended on June 30, compared to a loss of C$ 82 million a year ago.

The pipeline stock grew by almost 18 per cent YTD. As per Refinitiv findings, this large-cap stock saw an RSI value of 52.91 on July 28.

Bottomline

Commodity prices, including that of oil, have been sensitive to the current environment of rising inflation rate and interest rate hikes. This could have an impact on Cenovus and TC Energy stocks. Hence, investors should ideally be well-versed with the underlying commodity and track possible market reactions when thinking about these stocks.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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