Q: Kindly comment on the CNQ results just released this morning. Thanks.
CNQ has performed really well, grew its quarterly dividend twice (45% in total) in 2022 to $3.40 per share, and is now trading at 9x times' Forward P/E. In the 4Q, CNQ’s revenue grew 5.4% to $9.7B, compared to last year of $9.2B and EPS was $1.36 compared to last year of $2.14 (largely due to strong reinvestment driving significant increases in depreciation). The balance sheet is strong, with long-term debt (excluding leases) of $11.0B. Total debt is around 0.6x times trailing twelve-month cash flow of $19B, and cash flow grew nicely around 35% compared to $14.5B last year. Based on consensus estimates, sales are expected to decline by -14% this year, while EPS is expected to decline by -23% next year after a strong 2022. The company has been executing really well.
CNQ has been increasing dividends and repurchasing shares consistently over the last few years, supported by strong growth in free cash flow generation. The dividend was increased again today (5.9%). We like the company and think this is a solid quarter.