Assessing the Sustainability and Growth of Cenovus Energy Inc's Dividends

Cenovus Energy Inc (NYSE:CVE) recently announced a dividend of $0.14 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Cenovus Energy Inc's dividend performance and assess its sustainability.

What Does Cenovus Energy Inc Do?

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Cenovus Energy Inc is an integrated oil company, focused on creating value through the development of its oil sands assets. The company also engages in production of conventional crude oil, natural gas liquids, and natural gas in Alberta, Canada, with refining operations in the U.S. Net upstream production averaged 786 thousand barrels of oil equivalent per day in 2022. The company had upstream projects across Western Canada; crude oil production and natural gas and NGLs production offshore China and Indonesia. The downstream operations include upgrading and refining operations in Canada and the U.S., and commercial fuel operations across Canada.

A Glimpse at Cenovus Energy Inc's Dividend History

Cenovus Energy Inc has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down Cenovus Energy Inc's Dividend Yield and Growth

As of today, Cenovus Energy Inc currently has a 12-month trailing dividend yield of 2.14% and a 12-month forward dividend yield of 2.25%. This suggests an expectation of increased dividend payments over the next 12 months.

Over the past three years, Cenovus Energy Inc's annual dividend growth rate was 102.70%. Extended to a five-year horizon, this rate decreased to 23.90% per year. And over the past decade, Cenovus Energy Inc's annual dividends per share growth rate stands at -13.10%.

Based on Cenovus Energy Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Cenovus Energy Inc stock as of today is approximately 6.25%.

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Cenovus Energy Inc's dividend payout ratio is 0.24.