Two Energy Buys on Breaking News: CVI CVE

NEW YORK (TheStreet) -- The big and unexpected news Monday was the CVREnergy (CVI) announcement that it will be spinning off its refinery business in an IPO. That should be a big positive for current shareholders.

What's also interesting is that the commodity looks ready to break out.

The price of West Texas Crude recently dipped below $90-a-barrel before a modest recovery. Now it's time to focus our aim on two energy companies with layers of value and a current "surprise."

First take a look at a one-year chart of United States Oil ( USO), which seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil.

USO Chart USO data by YCharts

Looks like a chart of a commodity that wants to move higher especially in light of all the saber rattling between Iran and Israel.

Is the supply of oil about to be temporarily restricted as the U.S. presidential election approaches? Even if WTI crude stays about the same, the price of gasoline at the pump is at or above $4-a-gallon and it appears there are some refinery issues causing gasoline to be in tight supply.

Any way you slice this "crude" pie, it's a good time to be in the oil producing and refining business. That's why careful investors who don't want to overpay for growth-with-income are considering companies like Cenovus Energy ( CVE).

Cenovus is an integrated oil company which, together with its subsidiaries, engages in the development, production and marketing of bitumen, crude oil, natural gas and natural gas liquids in Canada with refining operations in the U.S.

The company's Oil Sands segment owns and operates bitumen producing assets at Foster Creek and Christina Lake, heavy oil assets at Pelican Lake, and some new resource plays such as Narrows Lake, Grand Rapids and Telephone Lake. Their natural gas assets in the Athabasca tar region are on tap for the creation of natural gas liquids.

Cenovus' patented blow-down boiler technology enables them to reuse a greater percentage of the water they utilize to generate steam at their oil sands operations, which are profitable with oil prices at current levels.

You can learn about their second-quarter earnings results, their innovative approaches to finding and refining energy, and you can enter their "Great Communities Contest" and try to win $5,000 for your favorite charity, all by going to their very interesting Web site.

CVE pays a dividend yield-to-price of 2.7% if you can wait to buy shares at $34 or below. Its almost three-year chart below shows how the price of their shares correlates with its 17% Return-on-Equity (ROE).

CVE Chart CVE data by YCharts

Some of Cenovus' best results from their second quarter 2012 report derive from the fact that oil production climbed 28% to nearly 155,000 barrels-per-day. CVE received approval during that quarter for its Narrows Lake oil sands development, which is anticipated to have a production capacity of around 130,000 barrels-per-day.

Yes, earnings-per-share during the second quarter dropped almost 40% (year-over-year) mostly due to lower oil prices during that quarter. Yet its revenue grew by over 5% to a trailing-12-months total of over $17.25 billion. This helped keep the dividend payout ratio to 40%, which should be sustainable for the foreseeable future. Again, I like CVE when it's at or below $34-a-share.

Taking a Spin at CVREnergy

The other energy company worthy of our consideration is an interesting side of the energy business with a profitable "kicker" to boot! CVREnergy is in the refining, marketing and transportation fuels business in the United States. The company also produces and markets nitrogen fertilizer products.

Monday CVI announced that wholly owned subsidiary CVR Refining has filed a registration statement on Form S-1 with the SEC in connection with a proposed initial public offering of its common units representing limited partner interests.

CVR Refining intends to list its common units on the New York Stock Exchange under the symbol "CVRR." The number of common units to be offered and the price range for the offering have not yet been determined. All of the common units to be sold in this offering, including the common units that may be sold to satisfy the underwriters' over-allotment option, will be sold by CVR Refining.

You can read all the details and learn more about this multifaceted organization at its well-organized Web site. Monday's announcement confirms my analysis that with CVI, the whole is worth more than the sum of its parts. That's one of the big reasons that shares of CVI leaped almost 10% on the announcement of the spin-off of CVR Refining.

Potential investors may want to await more details concerning today's big news from CVI. One way to play this situation is to buy half of the shares you want now and then see if there's a pullback or a recalibration of the value of the CVR Refining IPO. This way you might have the chance to buy the other half at an even lower price.

These are the kinds of energy companies that have numerous valuable operations, properties and hidden "treasures" that can reward shareholders who anticipate the unlocking or unwinding of the company's segments. Check them out for yourselves and consider benefiting from their profitable plans.

As of the time of publication the author held no positions in any of the stocks mentioned.

Jim Cramer and Stephanie Link actively manage a real money portfolio for his charitable trust -- enjoy advance notice of every trade, full access to the portfolio, and deep coverage of the latest economic events and market movements.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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