Q: Good morning - I'm thinking about taking some gains in SU and adding CNQ. I've read recently that CNQ has reduced debt big time and may be jumping dividends. Which company holds the better prospects for both dividends ( and possible gains) over the medium term. Thanks
5i Research Answer:
SU did raise its dividend this week; CNQ raised its dividend Nov 02. We think both have the potential to continue to bump up dividends over the next couple of years. CNQ debt has gone from $23B to $13B since 2020. Cash flow has gone from $4.7B to $12B in that time. CNQ has outperformed SU but SU is significantly cheaper on valuation. We would see this contest as essentially a tie. We would be fine taking some SU and moving to CNQ for some diversification. We would be less inclined to do so if taxes apply on SU.