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Why Cenovus Energy (CVE) is a Top Dividend Stock for Your Portfolio
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Cenovus Energy in Focus
Based in Calgary, Cenovus Energy (CVE - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of 23.78%. Currently paying a dividend of $0.1 per share, the company has a dividend yield of 2%. In comparison, the Oil and Gas - Integrated - Canadian industry's yield is 3.4%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.41 is up 5.9% from last year. Cenovus Energy has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 35.17%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cenovus's current payout ratio is 23%. This means it paid out 23% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CVE for this fiscal year. The Zacks Consensus Estimate for 2024 is $1.92 per share, with earnings expected to increase 22.29% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that CVE is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Why Cenovus Energy (CVE) is a Top Dividend Stock for Your Portfolio
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Cenovus Energy in Focus
Based in Calgary, Cenovus Energy (CVE - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of 23.78%. Currently paying a dividend of $0.1 per share, the company has a dividend yield of 2%. In comparison, the Oil and Gas - Integrated - Canadian industry's yield is 3.4%, while the S&P 500's yield is 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.41 is up 5.9% from last year. Cenovus Energy has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 35.17%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Cenovus's current payout ratio is 23%. This means it paid out 23% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CVE for this fiscal year. The Zacks Consensus Estimate for 2024 is $1.92 per share, with earnings expected to increase 22.29% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that CVE is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).