Energy stocks contributed to a decline on the S&P/TSX Composite Index on October 2 even as oil and gas prices have showed strength in the early fall. The index was down triple-digits in late afternoon trading.
This will likely disappoint investors who may have hoped for a boost after Canada secured a trilateral trade pact with the United States and Mexico over the weekend.
Today, we are going to focus in on an energy stock that could benefit from higher oil and gas prices and represent a solid buy-low opportunity considering the latest dip.
Cenovus Energy (TSX:CVE)(NYSE:CVE) is a Calgary-based integrated oil company which is focused on the development of its oil sands assets. Shares were down 2.85% in late afternoon trading on October 2. The stock is still up 16% in 2018 so far.
Cenovus Energy posted a $418-million loss in the second quarter of 2018. This was largely due to a hedging program that was instituted to protect the company from oil price volatility. However, revenue beat estimates and grew to $5.83 billion compared to $4.04 billion in Q2 2017. Cenovus is set to release its third-quarter results in late October or early November.
Cenovus last declared a dividend of $0.05 per share representing a modest dividend yield of 1.5%. The stock has posted promising growth since early 2018 and the company should continue to benefit from higher oil prices into the fall and winter. Investors on the hunt for growth and income should consider buying into the dip.
