CNQ Stock Fell by 1.7% in November: Is it a Buy Now?

CNQ stock is down in recent days after a relatively stable November. Is the dip a good opportunity to buy?

| More on:
energy industry

Image source: Getty Images

Canadian oil stocks are on a roller-coaster ride in 2022. The surge in Canadian Natural Resources (TSX:CNQ) through October caught many investors by surprise, and recent weakness after a steady November has energy investors wondering if the latest dip is another good opportunity to buy CNQ stock.

Canadian Natural Resources overview

CNRL is Canada’s largest energy company with a current market capitalization near $84 billion. The asset portfolio includes both liquids and natural gas production and resources. CNRL operates oil sands, conventional heavy and light oil, offshore oil, natural gas liquids, and natural gas production sites.


The rebound in oil and natural gas prices after the pandemic crash continues to drive strong profits for CNRL. Adjusted net earnings for the first nine months of 2022 came in at $10.67 billion compared to $4.79 billion in the same period last year.


Management is using excess cash flow to reduce debt, buy back shares, and boost dividends.

The board just raised the quarterly dividend by 13% to $0.85 per share. This is on top of a 28% increase earlier in 2022 and a 25% boost late last year. In addition, investors received a bonus dividend of $1.50 per share in August.

CNRL has raised the dividend for 23 consecutive years. This is a solid track record in an industry where volatile commodity prices determine profitability. At the time of writing, the current dividend provides an annualized yield of 4.5%.

As net debt continues to drop, investors could see more bonus payouts emerge.

Oil market

West Texas Intermediate (WTI) oil is on a downward trend in recent days, wiping out the 2022 gains. The current price is US$74 per barrel compared to the 2022 high above US$120.

Oil bulls say a shortage of supply and ongoing demand growth will likely drive the price of oil back above US$100 per barrel in 2023. A reopening of the Chinese economy is expected to occur as the government eases COVID-19 restrictions. At the same time, global producers are unable or unwilling to boost production. A lack of investment in the past two years means many producers are already at their limits. Stringent net-zero emission targets are holding back investments in large new projects. This situation is unlikely to change over the medium term.

Oil bears say a global recession in 2023 or 2024 will drive down fuel demand and keep the price of oil under pressure.

Should you buy CNQ stock now?

CNRL currently trades near $74 per share compared to the June high of $88, but it is still much higher than the July and September lows around $61. Ongoing volatility should be expected as a wide range of factors come into play in the oil market. Changes in the war in Ukraine, the global economy, China’s COVID restrictions, and OPEC decisions can all move the market quickly.

Investors with a bullish view on oil demand, however, might want to start nibbling near the current share price and look to add to the position on additional weakness. You get paid a decent dividend yield to ride out the volatility, and there is attractive upside potential if WTI oil moves back above US$100 next year.

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 recommends Canadian Natural Resources. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.

More on Energy Stocks

tsx today
Energy Stocks

TSX Today: What to Watch for in Stocks on Thursday, February 2

More corporate earnings reports could give further direction to TSX stocks today.

Read more »

oil and gas pipeline
Energy Stocks

Better Buy: Suncor Stock or Enbridge?

Amid the favourable environment, would you be better off investing in ENB or SU energy stock right now?

Read more »

Electric car being charged
Energy Stocks

Your Play to Get in on the 2023 EV Boom

Here's why Magna International may be the best way for Canadian investors to ride the EV boom.

Read more »

Energy Stocks

Algonquin Power & Utilities Stock Just Hit 52-Week Lows: Is it a Good Stock to Buy? 

Algonquin Power & Utilities (TSX:AQN) is trading near its seven-year low after dividend and outlook cuts. Is it a buy…

Read more »

tsx today
Energy Stocks

TSX Today: Why Canadian Stocks Could Fall on Tuesday, January 31

Despite the expected weakness in stocks today, the TSX index is on track to end the first month of 2023…

Read more »

Oil pumps against sunset
Energy Stocks

5 Things to Know About ARC Resources Stock in January 2023

Should you buy ARX stock?

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

2 Energy Stocks That Could Hold Up if Oil Prices Turn

Suncor Energy (TSX:SU) and Cenovus Energy (TSX:CVE) are great energy stocks that could continue higher through 2023.

Read more »

oil tank at night
Energy Stocks

2 Sub-$3 TSX Energy Stocks I’d Buy in 2023

Here are two under-$3 TSX energy stocks you can buy in 2023 and hold for the long term.

Read more »