When a dividend stock loses 50% in market value, investors take notice as the forward yield doubles.
One blue-chip TSX dividend stock that has lost 50% over the last four years is TELUS (TSX:T), enhancing the yield to more than 10% in June 2026.
However, a double-digit yield almost always signals one thing: the market does not trust the payout. And in TELUS’s case, the skepticism is well-founded.
- The Canadian telecom giant is dealing with a brutal wireless price war triggered by Quebecor’s Freedom Mobile expansion.
- Consolidated service revenue grew just 1% year-over-year in Q1.
- The company is adding subscribers but wrestling with lower average revenue per user.
- Moreover, its net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio sits at 3.4 times, and management has officially paused dividend growth to focus on debt reduction.
For income investors, a frozen dividend and a shrinking revenue engine are less than enticing.
So where should Canadian income seekers look instead?
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The bull case for this TSX dividend stock
Canadian Natural Resources (TSX:CNQ) is among the top dividend stocks on the TSX. Over the last two decades, CNQ stock has returned nearly 750% to shareholders after accounting for dividend reinvestments.
CNQ just raised its quarterly dividend to $0.625 per common share, payable July 7, 2026, to shareholders of record as of June 19, 2026. It brings the annualized dividend to $2.50 per share, which translates to a yield of over 4%.
Since the start of 2000, the Canada-based energy giant has raised its dividend at a compounded annual growth rate of 20%, which is exceptional.
Standout performance
In Q1 2026, CNQ reported total quarterly production of approximately 1,643,000 barrels of oil equivalent per day, a year-over-year increase of roughly 4%.
One of the standout performers was the Jackfish thermal in situ asset. Production at Jackfish hit approximately 134,000 barrels per day in the quarter, well above the facility’s nameplate capacity of 120,000 barrels per day.
Two new pads at Pike 1 are producing approximately 41,000 barrels per day combined and continue to exceed expectations, with a steam-to-oil ratio of approximately 1.8.
Meanwhile, at the Oil Sands Mining and Upgrading operations, monthly production rose to 630,000 barrels per day in April, with upgrader utilization running at 106%.
These numbers reflect how the lowest-cost operator in the industry runs assets at scale. CNQ reduced operating costs at the Albian oil sands site from $42 per barrel in 2017 to $25 or less today, which allows it to protect the dividend amid volatile oil prices.
In Q1, CNQ generated adjusted funds flow of $4.4 billion, or $2.10 per share. The company returned approximately $1.5 billion directly to shareholders in the quarter, including $1.2 billion in dividends and $300 million through share repurchases.
Since March 31, 2026:
- CNQ has accelerated buybacks to approximately $360 million.
- Year-to-date direct returns to shareholders sit at approximately $3.2 billion.
- Net debt has already dropped below $16 billion as of the end of April 2026, triggering the company’s shareholder returns policy to shift to 75% of free cash flow on a forward-looking basis.
- The next debt target is $13 billion, after which CNQ will allocate 100% of FCF to shareholders.
Compare that to TELUS, where cash is being diverted toward asset sales and debt management just to keep the payout flat.
The Foolish takeaway
The combination of record production, industry-best operating costs, 26 years of consecutive dividend growth, and a clear path to accelerating shareholder returns makes Canadian Natural Resources one of the most compelling income stocks on the TSX.
If you are building a portfolio for passive income, CNQ deserves a serious look.
