Every spring, the snow melts across northern Alberta. Then the rain arrives, and haul roads at oil sands mines turn into soup.
This year, Canadian Natural Resources (TSX: CNQ) worked through that weather and still posted the highest quarterly production in its history.
A few months later, a railroad CEO told analysts her crews had moved 4% more freight with fewer people and fewer locomotives.
Both Canadian companies also share a habit I care about as a long-term investor. The two TSX stocks pay shareholders a dividend and have consistently raised payouts over the past two decades.
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What makes a Canadian dividend stock worth holding for decades?
If you plan to own dividend stocks over the long term, it’s essential to calculate if the payout is sustainable across business cycles.
Ideally, a company should generate a steady stream of cash flow that increases each year, which translates to higher dividends over time.
A robust business model and an acceptable payout ratio allow the company to pay shareholders a dividend, reinvest in the business, target acquisitions, and lower debt.
Canadian Natural Resources: A record quarter behind a 26-year dividend streak
On the second-quarter call on August 6, President Scott Stauth said his teams handled challenging weather and still posted the highest quarterly production in company history.
Total output averaged about 1,677,000 barrels of oil equivalent per day, an increase of 18% year over year. The energy giant reported an adjusted funds flow of $3.30 per share, and adjusted earnings of $4.6 billion or $2.20 per share.
In Q2, CNQ paid $1.3 billion in dividends and $1.1 billion via share buybacks. It also reduced the net debt by $1.6 billion.
The quarterly dividend is now $0.625 per share, or $2.50 a year, up from $0.06 a year in 2006. Chief Financial Officer Victor Darel called 2026 the 26th straight year of dividend increases.
CNQ’s oil sands mining and upgrading operations ran at about $22.19 per barrel, allowing it to report a netback of $78 per barrel.
Stauth said big projects remain on hold until Alberta and Ottawa finalize agreements, while adding that “our shareholder returns will not be sacrificed.”
Canadian National Railway: The toll road that keeps getting more efficient
Last week, Canadian National Railway (TSX: CNR) reported adjusted earnings per share of $2.16, an increase of 18% year over year, while volume growth was much lower at 4%. The adjusted operating ratio in Q3 stood at 61%, which suggests it costs the company $0.61 to earn each dollar of revenue.
In the first nine months of 2026, the railroad behemoth reported free cash flow of $2.9 billion, an increase of 25% year over year. It also repurchased four million shares worth $675 million in the quarter.
CN pays a quarterly dividend of $0.915 per share after a 3% increase announced in January. The annual payout has increased from $0.33 per share in 2006 to $3.66 per share in 2026.
CEO Tracy Robinson explained that the company’s focus on productivity allows it to benefit from operating leverage and a growing cash flow base.
CN has more than 200 stored locomotives and open capacity. So, new freight can fill these lanes without additional capital expenditures.
A pending deal with Union Pacific extends CN’s reach into Mexico. Management notes about US$45 billion of trade flows between Canada and Mexico every year.
What are the risks of buying dividend stocks for life?
Neither stock comes with a guarantee for investors. No company is obliged to keep raising its dividend, and share prices can fall even when a business is firing on all cylinders. Canadian Natural is exposed to oil prices, and its biggest growth projects are waiting on government deals.
CN also faces certain risks. A change to the Elk Valley coal contract could shave off about $0.03 from 2027 earnings per share.
The company also took a $118 million noncash charge after two technology projects failed. Lastly, its labour contract with the Teamsters Canada Rail Conference expires at the end of 2026.
