Canadian income investors are searching for top TSX dividend stocks trading at discounted prices to add to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on passive income and long-term total returns.
Buying stocks on pullbacks takes courage and requires the patience to ride out some turbulence, but the strategy can deliver better dividend yields and a shot at decent capital gains on a rebound.
Canadian Natural Resources stock
Canadian Natural Resources (TSX:CNQ) trades near $43 per share at the time of writing compared to the 12-month high of around $53 reached last spring. The stock was as low as $35 last month when oil prices hit lows not seen since 2021.
West Texas Intermediate (WTI) oil trades near US$61.50 per barrel right now compared to $57 earlier this month. It was as high as US$80 over the past 12 months.
Recent volatility is due to market concerns surrounding the impact of tariffs on the U.S. and China, as well as the broader global economy. Oil traders worry that a recession in the United States and a deepening of the economic downturn in China that already put pressure on oil prices will reduce demand through the end of 2025 and into next year. Analysts had already predicted surplus conditions before the trade wars began in recent months, largely due to record production in non-OPEC countries, including Canada and the United States. OPEC also surprised the market by announcing plans to boost supply, even with oil prices at depressed levels.
The U.S. government wants oil prices to remain low to reduce gas prices and help offset inflationary pressures from tariffs. This could be an added headwind. That being said, the recent jump in the price of oil came as a result of the announcement that the U.S. and China are reducing tariffs for 90 days as they negotiate a trade deal. Investors should brace for ongoing news-driven volatility.
CNRL earnings
CNRL reported solid first-quarter (Q1) 2025 results despite the weaker conditions in the oil market. Adjusted net earnings came in at $2.4 billion compared to $1.5 billion in the same timeframe last year and $1.98 billion in Q4 2024.
Higher oil production and contributions from the US$6.5 billion acquisition of Chevron’s Canada operations helped boost profits. CNRL is also a major natural gas producer in Canada. Natural gas production came in higher and natural gas prices are above levels seen through most of 2024.
CNRL took on some extra debt to complete the big acquisition last year but is already making progress on the balance sheet. Net debt dropped $1.4 billion compared to the end of December 2024.
Dividends
CNRL raised the dividend twice in 2024 and increased the distribution again earlier this year by 4%. This is the 25th consecutive annual dividend increase from the board, which is impressive for a business that relies on commodity prices to determine its profits.
Investors who buy CNRL stock at the current level can get a dividend yield of 5.5%.
The bottom line
Near-term volatility is expected, but CNRL is an industry leader paying an attractive dividend that should continue to grow. If you have some cash to put to work in a TFSA or RRSP, this stock deserves to be on your radar.
