Canadian Natural Resources Limited (TSX:CNQ)(NYSE:CNQ), one of the world’s largest independent crude oil and natural gas producers, announced its second-quarter earnings results this morning, and its stock has reacted by rising over 3% in early trading. Let’s take a closer look at the quarterly results to determine if we should consider buying in to this rally or wait for it to subside.
A very strong quarterly performance
Here’s a quick breakdown of eight of the most notable statistics from Canadian Natural’s three-month period ended on June 30, 2017, compared with the same period in 2016:
| Metric | Q2 2017 | Q2 2016 |
| Product sales | $3.93 billion | $2.69 billion |
| Adjusted net earnings (loss) from operations | $332 million | ($210 million) |
| Adjusted earnings (loss) per share (EPS) | $0.29 | ($0.19) |
| Funds flow from operations (FFO) | $1.73 billion | $938 million |
| FFO per basic share | $1.50 | $0.85 |
| Natural gas production (million cubic feet per day) | 1,656 | 1,689 |
| Crude oil and NGLs production (barrels per day) | 637,127 | 502,410 |
| Barrels of oil-equivalent production per day | 913,171 | 783,988 |
What should you do with Canadian Natural today?
It was a fantastic quarter overall for Canadian Natural compared with the year-ago period, as it was able to grow its sales and reduce expenses to get back to profitability. The second quarter also capped off a great first half of the year for the company, in which its product sales increased 57.6% year over year to $7.8 billion, its FFO increased 104.8% year over year to $2.97 per basic share, and its adjusted net earnings came in at $609 million compared with an adjusted net loss of $753 million in the year-ago period.
With its very strong financial performance in mind, I think the market has reacted correctly by sending its stock higher, and I think it could continue higher from here, because energy investors will continue to pay up for a company that can achieve such great profitability in today’s low commodity price environment.
In addition, Canadian Natural has a great dividend, which I think will be another driving force behind investors piling into the stock. It currently pays a quarterly dividend of $0.275 per share, equal to $1.10 per share annually, which gives it a 2.8% yield. The company has also raised its annual dividend payment for 16 consecutive years, and its 10% hike in March has it on pace for 2017 to mark the 17th consecutive year with an increase, making it one of the best dividend-growth stocks in the industry.
With all of the information provided above in mind, I think all Foolish investors seeking exposure to the oil and gas industry should consider initiating positions in Canadian Natural Resources today.
