Dividend stocks are known for rewarding investors with regular cash payments. Regular cash distributions provide a predictable stream of returns that can support near-term financial needs, while reinvesting those dividends can significantly enhance long-term wealth through compounding.
Moreover, there are a few stocks that have been paying steady dividends and also beating the TSX with their capital gains year after year. These Canadian stocks have strong fundamentals, resilient earnings, solid balance sheets, and significant growth prospects that allow them to sustain and grow their dividend payouts and generate attractive long-term share price gains.
Against this background, investors could consider Canadian Natural Resources (TSX:CNQ) stock. The oil and gas producer is known for its resilient dividend payouts and is set to beat the TSX again and again.
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CNQ’s dividend history and capital gains
Canadian Natural Resources is one of the most reliable dividend payers. Unlike many of its peers, which either trimmed or suspended their payouts during commodity downturns and macro challenges, the energy giant has consistently maintained and increased its dividend.
Its strong dividend payments are supported by its long-life, low-decline energy assets and a diverse production mix across multiple crude oil types, natural gas, and natural gas liquids (NGLs). This provides the flexibility to allocate capital to higher-return opportunities and helps generate strong cash flow across all market conditions.
Canadian Natural Resources currently pays a quarterly dividend of $0.588 per share, yielding approximately 4.2%. Moreover, Canadian Natural has increased its dividend for 25 consecutive years. Over that period, the dividend has a compound annual growth rate (CAGR) of 21%, reflecting both disciplined capital allocation and expanding cash flow. In the current fiscal year, CNQ has returned roughly $4.9 billion to shareholders in dividends and $1.3 billion in share repurchases.
Beyond income, investors have also benefited from substantial capital appreciation. Over the past year, Canadian Natural’s shares have advanced more than 35%, outperforming the S&P/TSX Composite Index, which gained 29% during the same period. The longer-term performance is even more compelling. Over the last five years, Canadian Natural stock has grown at a CAGR of about 33%, resulting in total capital gains of about 317%.
Canadian Natural to deliver solid total return
CNQ is well-positioned to continue growing dividends at a solid pace and delivering a solid total return. Its high-quality assets position it well to generate solid cash flow, supporting its payouts and share price. While the majority of its operations are anchored in Canada, Canadian Natural also benefits from international exposure.
The company’s focus on driving operating efficiency will help maintain profitability and support its dividend payments. Moreover, its strategic acquisitions augur well for future growth. CNQ is also likely to benefit from a vast undeveloped land inventory that offers repeatable drilling opportunities, positioning the company to continue creating value for its shareholders.
The Canadian energy company will also benefit from its portfolio of low-risk, conventional projects that are quick to execute and require minimal capital. These projects can generate solid returns when market conditions are favourable. Further, CNQ’s solid balance sheet provides ample support to capitalize on growth opportunities.
Overall, it has a solid earnings base to sustain dividend growth in the coming years and is set to beat the TSX.
