When it comes to finding high-quality dividend stocks to buy for the long haul, one of the biggest challenges investors face isn’t figuring out which businesses to buy; it’s finding companies they can actually hold with confidence.
Because while long-term investing sounds simple, not every stock is built for it.
Some industries are too cyclical, some businesses require constant reinvestment just to maintain production, and in certain sectors, like energy, that uncertainty is exactly what makes investors hesitant to commit for a full decade.
That’s why Canadian energy producers aren’t always viewed as long-term holdings for dividend investors.
With that said, the one producer that continues to look compelling for long-term investors is Canadian Natural Resources (TSX: CNQ).
While Canadian Natural operates in a cyclical industry, the way the business is structured makes it far more predictable than most energy stocks, which is exactly why it’s a dividend stock I’d feel confident buying and holding for a decade.
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Why Canadian Natural Resources is a dividend stock you can buy and hold long term
One of the biggest reasons Canadian Natural sets itself apart is that, unlike many energy companies that constantly need to spend heavily just to replace declining production, the dividend stock operates large-scale oil sands assets that produce steady volumes for decades.
That difference is significant because instead of constantly chasing new production, CNQ can focus on optimizing what it already owns, which makes its cash flow far more predictable over time.
On top of that, its cost structure is extremely competitive. The dividend stock has some of the lowest operating costs in the industry, which means it can remain profitable even when oil prices decline. In fact, Canadian Natural’s break-even oil price is in the low-to-mid US$40s per barrel of West Texas Intermediate (WTI).
That’s easily one of the biggest reasons why Canadian Natural is one of the best dividend stocks on the TSX to buy and hold for a decade.
While other companies struggle when commodity prices fall, CNQ continues to generate strong cash flow. And that consistency is what allows it to support its consistently growing dividend and continue returning capital to shareholders in almost any environment.
A dividend strategy built for long-term investors
In addition to its asset base and cost advantage, what really makes Canadian Natural so attractive for passive income seekers is how the dividend stock returns cash to investors.
Right now, with net debt still above its long-term target of $13 billion, it’s returning roughly 75% of its free cash flow to shareholders through dividends and share buybacks. So even after the stock has rallied in recent weeks, Canadian Natural’s dividend still offers an attractive yield of roughly 4%.
And as it continues to reduce that debt, that payout is expected to increase. For example, once the dividend stock’s net debt is reduced below $13 billion, which analysts anticipate could happen within the next 12–18 months, it plans to return essentially 100% of its free cash flow to investors.
That’s a significant shift because it means that as the balance sheet improves, more and more of the company’s cash flow goes directly back to shareholders.
Therefore, given its asset base, strong free cash flow generation, and disciplined capital strategy, it’s no surprise that the stock has increased its dividend for more than two decades straight.
And that’s not just attractive because of the dividend growth, it shows you can have confidence in Canadian Natural through multiple oil price cycles, including some of the worst downturns the energy sector has ever seen.
That kind of track record matters because it shows that the business isn’t just built to perform in strong environments like we’re in today, but it’s built to survive and continue rewarding investors even when industry economics deteriorate.
That’s why it’s one of the best dividend stocks, especially in the energy sector, to buy and hold for years. It’s a business you can buy with confidence, knowing it will continue generating cash flow and returning it to shareholders through every part of the cycle.
