Valued at a market cap of $41.6 billion, Cenovus Power (TSX:CVE) is a Canadian built-in power firm that develops oil sands, refines petroleum merchandise, and operates throughout a number of segments, together with oil sands, typical, offshore, and each Canadian and U.S. refining operations.
Its major belongings embody main oil sands tasks, reminiscent of Christina Lake, Foster Creek, and Dawn, in northern Alberta and Saskatchewan, in addition to pure fuel operations throughout western Canada.
Cenovus operates a rising portfolio of downstream infrastructure, together with the Lloydminster upgrading complicated, which converts heavy oil into artificial crude and different merchandise, in addition to refining amenities that produce gasoline, diesel, and jet gasoline. Cenovus additionally maintains offshore exploration actions and crude-by-rail terminals.
Key progress catalysts embody the Narrows Lake undertaking, which is predicted to provide its first oil within the third quarter (Q3) of 2025. The undertaking encompasses a 17 km operational tieback pipeline accessing high-quality reserves at diminished prices. Furthermore, the offshore West White Rose undertaking goals to realize first oil by Q2 of 2026, with gravity-based construction set up deliberate for summer time 2025.
Cenovus focuses on optimizing steam capability throughout present operations whereas sustaining disciplined price administration and increasing downstream capabilities.
Within the final 10 years, CVE inventory has returned 71% to shareholders, after adjusting for dividend reinvestments. Let’s see if this TSX power inventory is an efficient purchase proper now.
Is Cenovus Power a superb inventory to personal?
In Q2 of 2025, Cenovus reported an adjusted funds circulate of $1.5 billion, regardless of manufacturing impacts from the Caribou Lake wildfire that briefly shut down Christina Lake operations.
Earlier this month, the TSX power large disclosed plans to amass MEG Power for $7.9 billion. The deal combines two main SAGD (steam-assisted gravity drainage) operators, with MEG’s 110,000 barrel-per-day Christina Lake asset straight adjoining to Cenovus’s present operations.
Administration expects synergies to develop from $150 million yearly in 2026-2027 to over $400 million by 2028, pushed by operational efficiencies and growth optimization.
The downstream enterprise carried out properly in Q2, with Canadian refining attaining a report quarterly throughput of 112,000 barrels per day at 104% utilization. Main turnarounds at Foster Creek, Dawn, and Toledo refineries have been accomplished forward of schedule and underneath price range, positioning the corporate for improved operational efficiency.
Financially, Cenovus maintains a robust steadiness sheet with web debt of $4.9 billion, a lower of $150 million quarter over quarter. The corporate returned $819 million to shareholders by way of dividends and share buybacks, whereas persevering with to scale back its debt towards its $4 billion goal.
With major upkeep cycles concluding and progress tasks approaching startup, Cenovus seems well-positioned to generate elevated free money circulate and improve shareholder returns.
What’s the goal value for the TSX dividend inventory?
Analysts monitoring CVE inventory forecast adjusted earnings to broaden from $1.91 per share in 2024 to $2.02 per share in 2027. In the present day, CVE inventory trades at a ahead price-to-earnings a number of of 15.4 occasions, which is increased than its 10-year common of 10.6 occasions.
If the TSX inventory is priced at 13 occasions earnings, it ought to commerce at $26 per share in early 2027, indicating an upside potential of 10% from present ranges. If we alter for dividends, cumulative returns might be nearer to twenty% over the subsequent 18 months. Given consensus value targets, CVE inventory trades at a 16% low cost in August 2025.
