While it’s true that energy stocks often go through cycles, the best-managed and fundamentally strong ones keep focusing on long-term growth prospects. Cenovus Energy (TSX:CVE) seems to be proving that point right now. Even as oil price volatility and operational challenges hit parts of its business in 2025, the company is continuing to deliver operational wins, advance key projects, and reward shareholders.
Interestingly, Cenovus Energy recently announced its plan to buy MEG Energy (TSX:MEG), making it one of the most talked-about deals in the Canadian energy sector this year. For Foolish Investors, the big question is whether this mix of strong fundamentals and bold growth will push CVE stock higher in the coming months.
In this article, let’s take a closer look at Cenovus Energy’s latest results and find out whether the company’s strategy makes it an attractive buy today.
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Cenovus Energy at a turning point
In the second quarter of 2025, Cenovus Energy posted a 17% year-over-year decline in its total revenue to $12.3 billion due mainly to lower benchmark oil prices and reduced upstream production. As a result, the company’s net earnings landed at $851 million, slightly lower than the $1 billion posted in the same quarter of 2024. Maintenance activity at its Foster Creek, Sunrise, and offshore assets, along with temporary wildfire-related shutdowns at Christina Lake, weighed on Cenovus Energy’s production in the latest quarter.
Despite those short-term headwinds, the company’s cash from operating activities almost doubled from the previous quarter to $2.4 billion. Also, Cenovus executed its turnarounds ahead of schedule and hit major milestones on large projects. Notably, it achieved first oil at Narrows Lake in July, advanced its Foster Creek optimization project, and moved closer to completion of the massive West White Rose offshore development.
These projects are expected to boost the company’s production capacity significantly in the next couple of years, which should contribute positively to its cash flow.
Cenovus Energy to acquire MEG Energy
Cenovus recently entered into a definitive agreement to acquire MEG Energy in a $7.9 billion cash and stock deal. This acquisition is likely to strengthen its position as Canada’s top steam-assisted gravity drainage (SAGD) producer. The deal not only adds 110,000 barrels per day of high-quality oil sands production but also promises more than $400 million in annual synergies by 2028.
More importantly, Cenovus structured the deal to preserve its investment-grade balance sheet, highlighting its focus on maintaining a strong financial base.
Is Cenovus Energy stock a buy?
After rallying by 268% over the last five years, CVE stock is currently trading at $22.68 per share, giving it a market cap of about $40.5 billion. It pays a quarterly dividend that translates into an annualized yield of roughly 3.5%.
For long-term investors, the takeaway is that Cenovus is balancing near-term challenges with ambitious growth. The company has maintained strong cash generation even in a softer pricing environment, keeps rewarding shareholders, and is executing large-scale projects that could transform its earnings power in the years ahead.
With its MEG acquisition adding scale and efficiency, Cenovus is striving to position itself as a stronger and more competitive player in the Canadian oil sands. So, if you’re looking for a stock that combines dividends, long-term growth potential, and exposure to Canada’s energy sector, Cenovus Energy could be a great stock to consider at today’s levels.
