Canadians may be tightening their budgets this summer, but that doesn’t mean they’re cutting back on experiences. According to a new BMO survey, 77% still plan to travel, with average spending set at $3,825. While many are cutting costs or using points to make it happen, one way to fund those trips year after year is to lock in passive income. For investors seeking big monthly cash flow, Canadian Natural Resources (TSX:CNQ) is looking like a cash flow machine that delivers just that, and then some.
The numbers
CNQ does not pay a formal monthly dividend, but when you account for its regular quarterly payout plus its robust share buybacks and special dividends, the income stream becomes even more attractive, especially if you’re reinvesting. In its latest earnings report for the first quarter of 2025, the dividend stock once again demonstrated why it’s one of Canada’s most dominant energy stocks.
Total revenue for the quarter came in at $8.22 billion. While that was down slightly from $8.65 billion last year, CNQ still delivered strong net earnings of $1.63 billion, or $1.55 per share. Cash flow from operations hit $3.45 billion, and free cash flow after dividends and capital expenditures stood at $1.9 billion. This is what makes CNQ such a reliable income engine. It generates so much cash that it can fund growth, pay dividends, reduce debt, and still reward shareholders with buybacks.
What really caught the market’s attention was CNQ’s announcement of another special dividend of $1.00 per share, payable in July. That’s in addition to its annual dividend of $2.35. Annualizing this total for 2025 so far gives shareholders $3.35 per share, which translates to a yield around 7.74% at recent share prices near $43.25 — not bad for a dividend stock that also has long-term growth potential.
More to come
Even if you only count the regular dividend, CNQ’s base payout is impressive. The dividend stock has raised its base dividend for 24 straight years, including a 5% increase in March. Unlike many high-yielders that use debt to fund distributions, CNQ earns its yield through disciplined capital management and conservative spending. Its payout ratio is around 38% of adjusted funds flow, leaving plenty of room for more special dividends if oil prices remain strong.
Speaking of oil, production also increased. Total production averaged 1.39 million barrels of oil equivalent per day, up from 1.31 million last year. Stronger natural gas liquids and light crude production helped offset some of the weaker pricing seen early in the quarter. And with pipeline capacity improving, including the Trans Mountain expansion, CNQ is well-positioned to benefit from better pricing on exports.
Of course, risks remain. CNQ is still a commodity producer. That means profits will rise and fall with oil prices. Regulatory risks are also always present in the energy space, and environmental concerns could impact long-term valuations. But the dividend stock has been reducing emissions intensity and investing in carbon capture projects, aiming to show it can lead in responsible resource development.
Bottom line
What sets CNQ apart is how shareholder-focused it is. In the first quarter alone, the dividend stock returned $2.3 billion to investors through dividends and buybacks. That’s nearly 70% of adjusted funds flow. It plans to continue returning 100% of free cash flow to shareholders once net debt falls below its $10 billion target, something it’s well on track to achieve.
So, if you’re a TFSA investor looking to fund summer vacations or just wanting monthly-style income that rolls in like clockwork, CNQ offers a compelling case. The official yield may look quarterly, but the effect is constant cash. Whether you reinvest it or use it to offset rising prices, it helps create the financial breathing room so many Canadians say they need right now.
In a summer where 46% of Canadians say they’ve cut spending just to afford travel, it’s worth looking at long-term ways to fund your freedom. CNQ may not be the traditional monthly payer, but with consistent income, special dividends, and huge free cash flow, it acts like one. That makes it a real cash flow machine, and one that might just power your portfolio and your vacations for years to come.
