Canadian Natural Resources Limited (TSX:CNQ)(NYSE:CNQ), one of the largest independent crude oil and natural gas producers in the world, announced first-quarter earnings results before the market opened on May 7, and its stock has responded by remaining relatively flat in the trading sessions since. Let’s take a closer look at the quarterly results to determine if this lack of movement represents a long-term buying opportunity, or if there is an underlying factor holding the stock back.

Lower commodity prices lead to weak first-quarter results

Here’s a summary of Canadian Natural Resources’ first-quarter earnings results compared with its results in the same period a year ago.

Metric Q1 2015 Q1 2014
Adjusted Earnings Per Share $0.02 $0.85
Revenue, Net of Royalties $3.03 billion $4.40 billion

Source: Canadian Natural Resources

Canadian Natural Resources’ adjusted earnings per share decreased 97.6% and its revenue decreased 31% compared with the first quarter of fiscal 2014. These very weak results can be primarily attributed to the sharp decline in commodity prices in the last year, which led to the company’s average realized selling price of crude oil and natural gas liquids decreasing 53.5% to $37.03 per barrel and its average realized selling price of natural gas decreasing 40.6% to $3.38 per thousand cubic feet.

Here’s a quick breakdown of 10 other notable statistics from the report compared with the year-ago period:

  1. Total production increased 31.2% to 898,053 barrels of oil equivalents per day
  2. Production of natural gas increased 50.7% to 1.77 billion cubic feet per day
  3. Production of crude oil and natural gas liquids increased 23.3% to 602,809 barrels per day
  4. Adjusted net income decreased 97.7% to $21 million
  5. Total product sales decreased 35.1% to $3.23 billion
  6. Cash flow from operations decreased 36.2% to $1.37 billion
  7. Cash flow from operations decreased 36.5% to $1.25 per share
  8. Net cash provided by operating activities decreased 7.3% to $1.25 billion
  9. Capital expenditures decreased 25.4% to $1.41 billion
  10. Ended the quarter with $34 million in cash and cash equivalents, an increase of 36% from the beginning of the quarter

Canadian Natural Resources also announced that it will be maintaining its quarterly dividend of $0.23 per share, and the next payment will come on July 1 to shareholders of record at the close of business on June 12.

Is Canadian Natural Resources worth buying today?

The first quarter was very weak for Canadian Natural Resources, so I think the lack of movement in its stock is more than warranted. However, I do think the company represents a very attractive long-term investment opportunity today.

First, I think commodity prices will continue to rebound in the next 52 weeks, with the price of crude oil heading back towards about $75 per barrel, and this will lead to higher sales and profitability for Canadian Natural Resources. Higher commodity prices will also lead to increased demand for the stocks of energy companies, driving them higher.

Second, Canadian Natural Resources’ stock trades at just 23.2 times fiscal 2016’s estimated earnings per share of $1.65, which is very inexpensive given its long-term growth potential. In addition, as commodity prices recover, I think it is very likely that this earnings estimate will move much higher.

Third, Canadian Natural Resources pays an annual dividend of $0.92 per share, which gives its stock a 2.4% yield at today’s levels. A 2.4% yield may not seem impressive at first, but it is very important to note that it has increased its dividend for 15 consecutive years, making it one of the top dividend-growth plays in the industry today.

With all of the information provided above in mind, I think Canadian Natural Resources represents one of the best long-term investments in the energy sector today. Foolish investors should take a closer look and strongly consider establishing positions.

Want two more of our TOP energy stock picks?

If so, check out our special FREE report "2 Canadian Energy Stocks on the Cusp of a Powerful Long-Term Trend." In this report, you'll find that Canada is rich in other energy sources that are poised to take off. Click here now to get the full story.


Let’s not beat around the bush – energy companies performed miserably in 2015. Yet, even though the carnage was widespread, not all energy-related businesses were equally affected.

We've identified an energy company we think offers one of the best growth opportunities around. While this company is largely tied to the production of natural gas, it doesn't actually produce the gas. Instead, it provides the equipment required to get natural gas from the ground to the end user. With diversified operations around the globe, we think it's a rare find in the industry.

We like it so much, we’ve named it as 1 Top Stock for 2016 and Beyond. To find out why, simply enter your email address below to claim your FREE copy of this brand new report, "1 Top Stock for 2016 and Beyond"!

Fool contributor Joseph Solitro has no position in any stocks mentioned.