With many top dividend payers in sectors such as banking, energy, utility, and materials trading near their highs, finding undervalued opportunities has become challenging.
However, shares of a few high-quality Canadian stocks with a solid dividend record have pulled back a bit. This provides an opportunity to buy and hold these top dividend payers forever at a more attractive valuation.
One such top Canadian dividend stock is Canadian Natural Resources (TSX:CNQ). Shares of the oil and gas company have fallen more than 13% over the past month and are trading roughly 20% below their 52-week high of $70.99.
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Canadian Natural has raised its dividend for 26 years in a row
Canadian Natural Resources is one of the most dependable dividend stocks. While the energy sector often witnesses sharp swings in commodity prices, the company has consistently rewarded investors by growing its dividend through multiple market cycles. Its solid payouts highlight the resilience of its business model and financial strength.
Most recently, Canadian Natural raised its annualized dividend to $2.50 per share, extending its dividend growth streak to 26 consecutive years. Moreover, Canadian Natural’s dividend has grown at a 20% compound annual growth rate (CAGR) over that period, reflecting the company’s ability to generate strong and sustainable free cash flow.
The oil and gas producer’s payouts are driven by its portfolio of long-life, low-decline assets. These assets require relatively little reinvestment to maintain production, allowing the company to generate healthy cash flows even during periods of lower commodity prices. This financial strength also gives Canadian Natural the flexibility to pursue acquisitions, reduce debt, and continue returning capital to shareholders through higher dividends.
Canadian Natural currently pays a quarterly dividend of $0.63 per share, yielding about 4.4%.
Canadian Natural is built to keep growing its dividend
Canadian Natural appears well-positioned to continue raising its dividend for years to come, supported by strong cash generation, a resilient portfolio of long-life assets, and a disciplined approach to capital allocation.
The company’s financial performance remains robust. In the first quarter of 2026, Canadian Natural generated adjusted net earnings of $2.4 billion, while adjusted funds flow reached $4.4 billion. The strong cash generation enabled the company to return approximately $1.5 billion to shareholders during the quarter, including $1.2 billion in dividends and $300 million through share repurchases.
Looking ahead, its diversified portfolio of long-life, low-decline assets provides stable production, while its extensive infrastructure ownership in key operating regions helps control costs, improve market access, and enhance operational efficiency. These advantages strengthen the company’s ability to fund dividends, maintain a healthy balance sheet, and pursue value-accretive acquisitions when opportunities arise.
The company’s low-cost operating model further strengthens its dividend outlook. Low maintenance capital requirements and competitive break-even costs support consistent free cash flow generation, even during periods of weaker oil and natural gas prices.
Canadian Natural’s massive proved reserves also support its long-term investment case. In addition, its extensive undeveloped land position provides ample opportunities to expand production over time.
Overall, Canadian Natural is well-positioned to continue generating substantial free cash flow, supporting future dividend increases.
