Only for the more aggressive

Article Excerpt

CENOVUS ENERGY $26.16 (Toronto symbol CVE; Shares outstanding: 751.3 million; Market cap: $19.7 billion; SI Rating: Extra Risk; Dividend yield: 3.1%) holds the more aggressive assets from the EnCana split on December 1, 2009. Cenovus’ oil-sands projects, oil refineries and conventional natural gas remain profitable. But extracting oil from oil sands is a hugely capital-intensive enterprise. Oil sands projects can become unprofitable if oil prices fall. Cenovus earned $1.3 billion, or $1.74 a share, in 2009 (all amounts except share price in U.S. dollars). That’s down 19.5% from $1.6 billion, or $2.17 a share, in 2008. These figures exclude unusual items. Cash flow per share fell 20.0%, to $3.29 from $4.11. The declines were mainly caused by lower oil and gas prices: oil prices were down 31% from 2008, and gas prices were 54% lower. The new company pays a quarterly dividend of $0.20 (Canadian) a share. The annual rate of $0.80 yields 3.1%. Cenovus believes that its oil and natural-gas reserves will last…

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