5 Best Undervalued Dividend Stocks to Buy Now

2. Cenovus Energy Inc. (NYSE:CVE)

P/E Ratio: 12.91

Cenovus Energy Inc. (NYSE:CVE) is an integrated oil and natural gas company based in Canada. The company currently pays a quarterly dividend of C$0.105 per share and has a dividend yield of 1.67%, as recorded on October 24.

Jefferies initiated its coverage on Cenovus Energy Inc. (NYSE:CVE) with a Buy rating in October and a C$35 price target, holding a positive stance on energy transition names.

In Q2 2022,  Cenovus Energy Inc. (NYSE:CVE) generated an operating cash flow of $3 billion, compared with $1.3 billion in the prior-year quarter. Its adjusted fund flows came in at $3.1 billion, up from $2.5 billion during the same period last year. The company’s strong cash generation shows that its dividends are secured in the upcoming quarters as well.

Of the 895 elite funds in Insider Monkey’s database, 42 hedge funds owned stakes in Cenovus Energy Inc. (NYSE:CVE), compared with 44 in the previous quarter. These stakes have a total value of roughly $3 billion.

L1 Capital mentioned Cenovus Energy Inc. (NYSE:CVE) in its Q2 2022 investor letter. Here is what the firm has to say:

“MEG Energy and Cenovus Energy Inc. (NYSE:CVE): We continue to remain positive on the outlook for Energy. While a potential U.S. recession would result in softer oil demand, we believe this would be more than outweighed by China re-opening over the coming year (which would see a major lift in car and air traffic). Oil supply continues to remain constrained with sustained declines in global inventories and OPEC+ remains unable to grow production significantly. With the sell-off in energy stocks, MEG and Cenovus are currently generating more than 20% of their market cap in cash flow with large dividends and share buybacks to come. (Click here to view the full text)