Let’s face it: Canadian power shares aren’t the flashiest investments available on the market. However each occasionally, a inventory like Cenovus Vitality (TSX:CVE) begins flashing worth alerts for long-term buyers. Cenovus has quietly delivered a powerful first quarter in 2025. All whereas oil costs hover in a unstable vary and buyers wait to see what central banks do subsequent. Now, it would simply be the sort of alternative that’s straightforward to miss.
So must you purchase it whereas it’s nonetheless buying and selling under $20? Let’s have a look at the info earlier than leaping in.
Into earnings
In Q1 2025, Cenovus posted web earnings of $859 million, a big bounce from simply $146 million in This autumn 2024. Adjusted funds stream hit $2.2 billion, up from $1.6 billion the earlier quarter, and the power inventory generated $983 million in free funds stream. That’s a wholesome amount of money being churned out, particularly when you think about the $595 million returned to shareholders by means of dividends, share buybacks, and the redemption of most well-liked shares.
The power inventory isn’t standing nonetheless both. It elevated its base dividend by 11%, now sitting at $0.80 per share yearly. For yield-seeking buyers, that’s a pleasant bump backed by a dedication to return 100% of extra free funds stream, as soon as it hits $4 billion in web debt. As of March 31, 2025, web debt stood at $5.1 billion, barely up from $4.8 billion as a consequence of working capital wants, however nonetheless on the right track.
Working laborious
Operationally, Cenovus is firing on all cylinders. Upstream manufacturing got here in at 818,900 barrels of oil equal per day (BOE/d), edging previous final quarter’s already excessive 816,000 BOE/d. Downstream throughput additionally held regular at 665,400 barrels per day, and Canadian refining hit a document utilization price of 104%. U.S. refining efficiency improved too, due to fewer shutdowns and narrower worth differentials.
The power inventory can be progressing with its progress tasks. Narrows Lake began steaming in April and first oil is predicted in Q3. Dawn introduced one other pad on-line, and Foster Creek’s optimization is now 75% full. West White Rose is about 90% carried out and on monitor for first oil in mid-2026. These aren’t pie-in-the-sky plans, however as a substitute nicely underway, and aimed toward boosting manufacturing without having main new steam infrastructure.
Concerns
Right here’s the factor, although: Cenovus nonetheless faces headwinds. Whereas the operational outcomes are stable, free funds stream did dip from $1.2 billion in Q1 2024 to $983 million this quarter. The power inventory additionally noticed a drop in money from working actions in comparison with each final quarter and the yr earlier than. Plus, turnaround prices in U.S. refining are anticipated to be important in Q2, starting from $240 to $295 million. And that $4 billion web debt purpose nonetheless isn’t fairly inside attain.
So, if you happen to’re questioning whether or not Cenovus is an efficient purchase whereas it’s buying and selling below $20, it comes all the way down to what you need in your portfolio. If you happen to’re on the lookout for a cash-flowing, dividend-growing power identify with large-scale tasks nearing completion, it’s positively value a better look. However if you happen to’re after short-term progress or anxious about oil worth volatility and upkeep prices consuming into earnings, you would possibly wish to look ahead to a much bigger margin of security, or not less than see if it drops a bit extra throughout market dips.
Backside line
Cenovus received’t be the power inventory that doubles in a single day. It’s the sort of identify that sits in your portfolio, throws off money, and regularly improves its stability sheet whereas executing its long-term technique. It’s not a chance, it’s extra of a affected person play.
Whether or not that matches your investing model is the true query. However if you happen to’ve bought room for a resilient, well-managed power inventory that’s quietly delivering on its guarantees, Cenovus would possibly simply be value scooping up whereas it’s buying and selling under $20. Simply be sure to’re snug with the oil sector’s ups and downs, and don’t neglect to observe these turnaround prices in Q2.