Many growth stocks can rise or fall dramatically over a year, but great dividend-paying stocks usually don’t change nearly as quickly. That’s why experienced investors often pay less attention to short-term price swings and focus on what the company is actually doing. If a company’s earnings remain strong, cash keeps flowing, and dividends continue growing, its falling share price could be seen as good news rather than bad, as it simply gives investors another chance to buy a quality stock for less.
That seems to be the case with Canadian Natural Resources (TSX: CNQ) right now. Although CNQ stock remains roughly 19% below its 52-week high, the company continues to generate billions in cash flow, expand its operations, and reward shareholders with steadily rising dividends. As a result, the stock now trades at $57.74 per share with a market cap of $120 billion. It also offers an attractive 4.5% dividend yield at this price.
Let me explain why the recent weakness in Canadian Natural stock looks like an attractive long-term buying opportunity, especially for investors looking to build reliable passive income and long-term wealth.
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Recent results still show serious strength
Even as its stock has moved lower lately, Canadian Natural’s production and profitability remain strong. In the first quarter, the company posted average total production of 1,643,000 barrels of oil equivalent per day, up 4% year-over-year (YoY), while its liquids production reached 1,198,000 barrels per day. Its oil sands mining and upgrading segment alone produced 588,000 barrels per day of synthetic crude oil in the latest quarter, and conventional crude plus natural gas output also hit record levels.
The company backed that operational strength with hefty cash generation. As a result, its adjusted net earnings came in at $2.4 billion, or $1.17 per share, while adjusted funds flow reached $4.4 billion, or $2.10 per share.
Canadian Natural also returned $1.5 billion to shareholders in the quarter, including $1.2 billion in dividends and $0.3 billion in share repurchases.
Its dividend growth story is still getting better
A generous payout is attractive, but one that keeps growing could be even more rewarding.
Notably, Canadian Natural has increased its dividend for 26 consecutive years, and it recently lifted the quarterly dividend to $0.63 per share, or $2.50 annually. That stable growth helps explain why CNQ remains one of the most dependable income stocks on the TSX today, especially when the stock already yields about 4.5%.
The oil and gas producer is targeting 100% shareholder returns once net debt reaches $13 billion. That suggests there is still room for more dividends and buybacks if its execution stays strong.
Long-term projects add even more appeal
Beyond the recent strength, Canadian Natural is also continuing to accelerate its growth. Its front-end engineering work is underway for the 30,000-barrel-per-day Jackfish expansion and the 70,000-barrel-per-day Pike 2 project, while solvent-enhanced oil recovery pilots at Kirby and Primrose could open the door to more efficiency gains.
Overall, Canadian Natural offers scale, low-cost assets, a long dividend-growth history, and enough cash generation to keep rewarding shareholders. With the stock still trading well below its 52-week high, this looks like a rare chance to buy a proven income compounder at a discount.
