Why Crescent Point Energy (TSX:CPG) Stock Popped 8% Today

Crescent Point Energy (TSX:CPG)(NYSE:CPG) announced a 50% increase in its quarterly dividends today, which fueled a rally in its stock price.

| More on:
oil tank at night

Image source: Getty Images

What happened?

Crescent Point Energy (TSX:CPG)(NYSE:CPG) stock rallied sharply on the TSX today. While CPG stock price opened with about 5% gains this morning at $5.95 per share, it extended these gains further later in the session to as high as $6.16 per share — up more than 8% from its previous session’s closing. Notably, it was the third consecutive day when Crescent Point stock traded on a positive note.

So what?

Crescent Point Energy is a Calgary-based energy firm with its main focus on crude oil exploration and production along with the development of related projects. It currently has a market cap of around $3.3 billion, as its stock trades with over 100% year-to-date gains.

Today’s massive rally in CPG stock came after the company this morning announced a 50% increase in its quarterly dividend to $0.045 per share starting from the first quarter of 2022. Apart from this dividend increase, Crescent Point is targeting to repurchase up to $100 million shares in the next six months. These factors cheered investors and drove its stock higher today.

Another positive factor that supported its stock price rally today was Crescent Point’s increased production guidance for 2022. The company now expects its production to be between 133,000 to 137,000 boe/d next year. Its management also highlighted that it would continue to focus on strengthening the balance sheet.

Now what?

The year 2021 is proving to be great for Crescent Point Energy. After posting big adjusted net losses of about $4.76 per share in 2020, the Canadian energy company is expected to post a solid $4.40 per share adjusted net profit this year. That’s one of the key reasons why CPG stock has already more than doubled in 2021 so far.

Given Crescent Point’s fast-improving fundamentals and increasing dividends, I find it to be one of the best energy stocks to buy right now — especially for income investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Energy Stocks

grow dividends
Energy Stocks

TSX Energy Index Down 6.6%: How to Take Advantage of the Sell-Off

Investors can focus on generating passive income from three high-yield energy stocks while waiting for oil demand and prices to…

Read more »

Man data analyze
Dividend Stocks

Got $5,000? Buy These 2 Stocks and Hold Until Retirement

If you have $5,000 to invest, here are two TSX stocks you can buy and hold as part of your…

Read more »

Oil pumps against sunset
Energy Stocks

Better Buy: Suncor Stock or Enbridge?

Energy stocks are under pressure. Is Suncor or Enbridge now oversold?

Read more »

Increasing yield
Energy Stocks

Buy the Dip: 1 Blue-Chip Energy Stock With a Rising Dividend Yield

Suncor Energy (TSX:SU) stock is approaching deep-value territory, making it a top pick for Canadian value and income investors.

Read more »

oil and natural gas
Energy Stocks

Could Cenovus Energy Stock Hit $30 This Year?

Should you buy Cenovus Energy stock now?

Read more »

Oil pipes in an oil field
Energy Stocks

3 High-Yield Energy Stocks to Earn Passive Income for Years

High-dividend-paying TSX stocks such as Enbridge and two others offer investors the opportunity to generate passive income in 2023.

Read more »

Dollar symbol and Canadian flag on keyboard
Energy Stocks

2 Undervalued Canadian Stocks to Buy in March 2023

With the market on the cusp of a potential rebound, here are two undervalued stocks that should be on any…

Read more »

Gas pipelines
Energy Stocks

Better Energy Stock to Buy: Suncor or Canadian Natural Resources?

Suncor and Canadian Natural Resources are off their recent highs. Are these stocks now good to buy?

Read more »