Can Cenovus Sustain Its Growing Dividend?

The Canadian oil sands and natural gas producer Cenovus Energy (NYSE:CVE) announced plans to grow its dividend and shrink its significant debt at its analyst day last week. Though the company's exposed to oil and gas prices, management said any shifts in those commodities wouldn't affect its payout plans. With oil prices low, investors may doubt whether the company can keep that promise – but its assets suggest that management might indeed reach its goals.

Image source: Cenovus Energy.

Oil and gas prices have been volatile over the last several decades. For instance, WTI -- the U.S. oil benchmark -- exceeded $140 a barrel in 2008 before dropping below $40 at the beginning of 2009 and surge again above $100 in 2011. And these days, WTI prices mostly stay in the range of $50 to $65 a barrel.

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