Shares of Canadian Natural gained (NYSE:CNQ) (TSE:CNQ) over 13% last week on the back of a recovery in oil prices following the OPEC+ nation’s production cut announcement. While higher commodity prices are a boon for CNQ, what stands out is its stellar dividend history.
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CNQ’s Solid Dividend Payments
Canadian Natural Resources engages in the exploration, production, and marketing of crude oil, natural gas, and natural gas liquids (NGLs).
CNQ has consistently grown its dividends (for about 22 years) and maintained its payouts even in a low-commodity-price environment when its peers cut or suspended dividend payments. The company’s strong asset base generates solid cash to support its payouts.
Concurrent with its second-quarter results in August, CNQ announced a special dividend of C$1.50 per share, over and above the regular quarterly dividend of C$0.75 per share. The current annualized dividend of $4.50 translates into a dividend yield of 4.06%, which is impressive.
Year-to-date, the company has returned over $8 billion to its shareholders. This includes share repurchases worth $4.0 billion and $4.1 billion in dividends.
For Q2, Canadian Natural reported upbeat earnings that more than doubled year-over-year, easily beating consensus expectations. Record quarterly average natural gas production drove the beat. Further, the company also increased its production outlook and will be adding 40,000 barrels of oil equivalent (boe) per day to production growth in 2023 compared to the original 2022 midpoint of guidance.
Is CNQ a Good Stock to Buy?
The Wall Street community is clearly optimistic about the stock. Overall, the stock commands a Strong Buy consensus rating based on seven Buys and two Holds. Canadian Natural stock forecast of $71.76 implies 30.78% upside potential from current levels.
Further, CNQ stock boasts a score of 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
On top of that, TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Canadian Natural, with a whopping 3.6% of investors on TipRanks increasing their exposure to CNQ stock over the past 30 days.
Conclusion
Canadian Natural is scheduled to report its third-quarter FY2023 results on November 3, before the market opens. Canadian Natural shares have gained quite a lot with the recovery in oil prices. However, CNQ’s valuation still remains lower than its peers.
Income investors could consider adding CNQ stock for its solid dividend amid ongoing energy demand.
