Q: Can you contrast between Cenovus and Strathcona at current pricing ?Which do you think is more attractive in the next year from today on a total return basis?
5i Research Answer:
CVE is $42B market cap, 14X earnings, 3.46% yield and growth expected in the 10% range (with MEG).
SCR is $8B, 13X, 3.16%, with EPS expected to dip next year without MEG. It also has promised a $10 special dividend if it doesn't get MEG.
Both are solid companies. SCR has seen faster historical growth and we think is very well managed. We would be comfortable owning either. SCR, being much smaller, likely has more long term upside potential, if we include the special dividend as part of the return as well.