When markets get choppy, it’s easy to second-guess your investments. Stocks go up, stocks go down, and sometimes, the best time to buy a stock is exactly when it feels like you shouldn’t. That’s the case today with Canadian Natural Resources (TSX:CNQ), one of Canada’s top energy companies. It’s currently down about 26% from its 52-week high. And yet, for investors looking to lock in long-term income, this dip could be a golden opportunity.
About CNQ
Canadian Natural is one of the largest energy producers in Canada. It has a strong portfolio that includes crude oil, natural gas, and natural gas liquids. Its operations span across Western Canada, the North Sea, and offshore Africa. That means it isn’t tied to one commodity or region, and that diversity helps it remain resilient in volatile markets.
As of writing, shares of CNQ are trading around $40, well off the 52-week high of $53.45. That’s a 26% drop, and while the headline might sound dramatic, the business fundamentals tell a much different story. CNQ has a long history of managing through cycles. It’s not afraid of downturns, and that’s a big part of why it’s become such a reliable dividend stock over time.
Take the dividend stock’s most recent earnings, for example. In the fourth quarter (Q4) of 2024, CNQ generated revenue of $9.47 billion and net income of $1.14 billion. This was in the face of softer oil and gas prices and growing concerns about tariffs and recession risks. And despite that, the company still brought in solid cash flow and stayed profitable. That’s no small feat when energy prices are bouncing around.
CNQ also continues to reward shareholders directly. In its latest announcement, the dividend stock confirmed a quarterly dividend of $0.59 per share. At the current share price, that gives it a yield of 5.87%. That’s well above the average for Canadian dividend stocks. It’s worth noting that CNQ has increased its dividend for 24 consecutive years. If you’re looking for dependable income, it doesn’t get much better than that.
Looking ahead
But the case for CNQ isn’t just about yield; it’s also about long-term potential. Management has been investing heavily in future-facing energy strategies. One of the biggest areas of focus is carbon capture and storage. CNQ has partnered with other industry leaders to advance the Pathways Alliance, a carbon capture initiative that aims to help Canada reach its net-zero goals. That shows CNQ is thinking not just about this year’s earnings but about how to stay relevant and profitable in a low-carbon future.
The dividend stock is also doing a solid job managing its balance sheet. It finished 2024 with $9.7 billion in adjusted funds flow and $6.1 billion in free cash flow. That gives it plenty of flexibility to keep paying dividends, buying back shares, and investing in growth projects. And with a net debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio under one times, it has far more financial breathing room than many of its peers.
So, why is the dividend stock down? A lot of it comes down to fears over tariffs and reduced global demand. The re-emergence of trade tension between Canada and the U.S. has created new uncertainty in energy markets. And there’s been concern that oil demand could slow down if global growth continues to weaken. But these are near-term pressures. The fundamentals remain strong, and CNQ is well-positioned to navigate whatever comes next.
Bottom line
Long-term investors know that building wealth often means buying great companies when they’re temporarily out of favour. Right now, Canadian Natural fits that description. It’s a top-tier producer with low-cost operations, a reliable dividend, a strong balance sheet, and a clear strategy for future growth. And with the dividend stock down more than 26%, it’s offering a rare chance to lock in a high yield on a quality name.
