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Canadian Natural Resources (CNQ) is a Top Dividend Stock Right Now: Should You Buy?
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Canadian Natural Resources in Focus
Based in Calgary Alberta Canada, Canadian Natural Resources (CNQ - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of 15.64%. The oil and natural gas company is currently shelling out a dividend of $0.77 per share, with a dividend yield of 4.08%. This compares to the Oil and Gas - Exploration and Production - Canadian industry's yield of 1.7% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $3.09 is up 13.4% from last year. Canadian Natural Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 27.34%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Canadian Natural Resources's current payout ratio is 56%. This means it paid out 56% of its trailing 12-month EPS as dividend.
CNQ is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.75 per share, which represents a year-over-year growth rate of 0.35%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CNQ is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Canadian Natural Resources (CNQ) is a Top Dividend Stock Right Now: Should You Buy?
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Canadian Natural Resources in Focus
Based in Calgary Alberta Canada, Canadian Natural Resources (CNQ - Free Report) is in the Oils-Energy sector, and so far this year, shares have seen a price change of 15.64%. The oil and natural gas company is currently shelling out a dividend of $0.77 per share, with a dividend yield of 4.08%. This compares to the Oil and Gas - Exploration and Production - Canadian industry's yield of 1.7% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $3.09 is up 13.4% from last year. Canadian Natural Resources has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 27.34%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Canadian Natural Resources's current payout ratio is 56%. This means it paid out 56% of its trailing 12-month EPS as dividend.
CNQ is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $5.75 per share, which represents a year-over-year growth rate of 0.35%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CNQ is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).