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Highlights
- At 8 AM EST, WTI crude had decreased by 50 cents to US$ 102.23.
- Cenovus Energy appears to be well-positioned for further expansion.
- Due to volatility, even the oil stocks could record ups and downs.
Energy investors had a little less worrisome year as the sector performed significantly well than other sectors in Canada. The S&P/TSX Capped Energy Index gave returns of 34.4 per cent year-to-date (YTD).
As the second half of 2022 has already started, investors could wonder if it is worth investing in the energy stocks now. Many of the Toronto Stock Exchange-listed energy stocks have already given significant results. For example, Cenovus Energy Inc. (TSX:CVE) has returned 51 per cent so far, outpacing some of its competitors.
Markets continue to remain volatile, and the rising inflation rate indicates that it might be difficult to prevent a recession. Many businesses have already stopped hiring new employees, and some hard-hit tech corporations have even reduced their workforces.
People could fear that the rising interest rates to curb inflation will affect other sectors like base metals, energy, and utilities.
In this article, we'll look at the stock of Cenovus Energy and find out if it is worth exploring:
Should you buy CVE stock?
Firstly, it is important to note that price fluctuations might continue due to volatility. Hence, it is highly unlikely that short-term investors would benefit from the current situation.
Oil fell in choppy trade on Friday and was headed for a weekly fall as worries about a likely recession-driven decline in demand overcame the shortages in supply around the world.
At 8 AM EST, WTI crude had decreased by 50 cents to US$ 102.23, while Brent crude had decreased by 0.3 per cent to US$ 104.29 a barrel.
Due to volatility, even the oil stocks could record ups and downs, and long-term investors might remain patient in hopes of future growth.
Cenovus Energy appears to be well-positioned for further expansion, given its balance sheet strength. On June 13, the oil and gas company said it would acquire a 50 per cent remaining stake in the Sunrise oil sands project in Alberta.
Meanwhile, the company also announced it would restart the West White Rose Project. The plans indicate that Cenovus is looking to expand its business operations.
Bottom line
Notably, Cenovus achieved solid financial results in the first quarter and announced tripling its dividend. The company's cash from operations jumped 499 per cent year-over-year (YoY) to C$ 1,365 million.
Meanwhile, Cenovus achieved a net income of C$ 1,625 million in Q1 2022 compared to net earnings of just C$ 220 million in Q1 2021.
Please note, the above content constitutes a very preliminary observation or view based on digital trends 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.
