Listed on the Toronto Stock Exchange (TSX), Canadian oil and gas producer Canadian Natural Resources (TSX:CNQ) has seen its share price decline continuously. From its one-year high, the price has retraced by approximately 23% and is now hovering at around CAD 40 per share. This energy company, which has raised its dividend for 25 consecutive years, is attracting attention from investors who value dividend yield and long-term returns.
As one of Canada’s major integrated energy producers, CNRL boasts a diversified asset portfolio that includes oil sands, conventional heavy oil, light crude oil, offshore fields, and natural gas. Despite facing pressure on international oil prices in the latter half of last year, the company maintained steady performance by achieving record oil and gas production levels. In fiscal year 2024, operating net income reached CAD 7.4 billion, down from CAD 8.5 billion in 2023; however, following the strategic acquisition of Chevron Canada’s assets for USD 6.5 billion late last year, production continued to climb in the first two months of this year.
With WTI crude oil prices currently lingering around USD 57 per barrel—a significant drop from nearly USD 80 in May last year—the company’s management has demonstrated agile operational capabilities. Thanks to its full or absolute control of core assets, CNRL can quickly reallocate capital to optimize production. Financial data indicates that its breakeven cost remains in the range of USD 40-45, meaning that even at the current price level, a substantial profit margin is maintained.
Notably, the company continues its impressive record of sustained dividend increases, having raised its dividend twice in 2024 before doing so again for 2025—extending its consecutive annual dividend growth record to 25 years. The current share price translates into a dividend yield of 5.9%, providing investors with a buffer against market volatility.
Market analysts have highlighted that short-term oil prices remain pressured due to increased production from non-OPEC countries and a slowdown in Chinese demand, with OPEC+’s recent production increase adding to market stress. Nonetheless, geopolitical risks and potential breakthroughs in trade agreements might serve as catalysts for a rebound in oil prices. For long-term investors, the current valuation already presents an attractive allocation opportunity, and if the share price falls further to an intrayear low of CAD 35, it could represent an even more favorable entry point.
