The company looks well positioned to continue to perform well in 2022. That would essentially reduce its share count by over 7%! The Foolish bottom lineĪll in all, Cenovus has been doing all the right things. That is equivalent to $153 million! With debt declining fast, Cenovus plans to buy back 15 times that amount in 2022 (around 146 million shares). While that is only equivalent to an approximate 1% dividend yield today, analysts believe that its quarterly dividend could rise by three or four times in the future.Ĭenovus bought back 9.7 million shares in 2021.
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As it integrates the Husky assets and unlocks operational synergies, the company is primed for steady 4-6% production growth and strong free cash flow accretion.Ĭonsidering this strong position, management recently doubled its next quarterly dividend to $0.035 per share. It further targets to reduce net debt to less than $8 billion by mid-year 2022. By year end, Cenovus should reach its net debt target of $10 billion or less. After its massive $23.6 billion acquisition of Husky Energy, the company has been selling off non-core assets and de-levering its balance sheet. Should oil prices remain around the US$70 level or better, Cenovus should be in a very attractive position. Today, even at current prices, Cenovus stock is yielding over 15% in free cash flow. In a year, Cenovus went from earning modest netbacks to yielding massive amounts of free cash flow. News of the vaccine approvals and the gradual recovery from lockdowns helped propel West Texas Intermediate oil from US$47 per barrel to around US$75 today. Canadian energy stocks were essentially left for dead in 2020, when oil prices briefly turned negative. At the start of the year, the stock only had a market capitalization of $9 billion. So, what made Cenovus such an exceptional stock in 2021? Well, the stock was incredibly beaten down in 2020. It processes and refines about 500,000 barrels per day. In total, it produces around 800,000 barrels of oil equivalent (BOE) per day. The company operates conventional oil plays, huge oil sands projects, offshore production assets, an upgrading and refining business, and a broad array of energy infrastructure assets. Cenovus: An integrated energy leader in CanadaĬenovus is amongst the top three integrated energy producers in Canada.
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