13 Best Natural Gas and Oil Dividend Stocks To Buy

9. Cenovus Energy Inc. (NYSE:CVE)

Number of Hedge Fund Holders: 48

Dividend Yield: 3.44%

Cenovus Energy Inc. (NYSE:CVE) is a Canadian-based integrated energy company that develops, produces, refines, transports, and markets crude oil, natural gas, and refined petroleum products.

Cenovus Energy Inc. (NYSE:CVE) had a tough Q3 2024 as it reported a 56% decline in its Q3 2024 profit due to a fall in production and throughput volumes following oil sands and US refinery maintenance and lower commodity prices. However, the company’s upstream business continued to deliver strong operating results with production of approximately 771,000 BOE per day and an operating margin of $2.7 billion. It also spent $1.3 billion as capital investment during the quarter and its annual guidance for capital spending of $4.5 billion to $5 billion remained unchanged. Moreover, CVE returned approximately $1.1 billion of cash to its shareholders in the quarter in the form of share buybacks and dividends.

Cenovus Energy Inc. (NYSE:CVE) forecasts higher oil and gas production for 2025, expecting to benefit from new projects coming online. The company’s major growth projects in 2025 include achieving the first oil from Narrows Lake, installation of the West White Rose offshore facilities and commencement of drilling, and preparations for first steam at the Foster Creek optimization project.

L1 Capital stated the following about Cenovus Energy Inc. (NYSE:CVE) in its Q3 2024 investor letter:

“Cenovus Energy Inc. (NYSE:CVE) (Long -15%) and MEG Energy (Long -13%) shares fell as the WTI oil price decreased 17% to ~US$69/bbl on the back of increased concerns around a potential increase in OPEC supply along with slower global economic growth. Despite OPEC delaying a previously planned increase in oil output, the oil price continued to weaken due to the weaker demand outlook. During the quarter, we attended the Peters & Co oil and gas conference in Toronto, meeting one-on-one with management from Cenovus and MEG Energy, along with the entire peer group. We continue to favor Cenovus and MEG in the sector due to their strong cash flow generation, the long-life nature of their oil sands assets, low cost of production and strong balance sheets. Both Cenovus and MEG have now transitioned to returning 100% of free cash flow back to shareholders, having reached their respective net debt targets. As a result, we see both names offering sector leading shareholder returns, combined with some modest, accretive output growth.”