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Should You Add Canadian Natural Stock to Your Portfolio Now?
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Key Takeaways
CNQ shares rose 18.5% in six months, outpacing peers and the broader energy sector.
CNQ boasts 25 years of dividend growth, with a 5.4% yield backed by strong cash flow.
Strategic acquisitions and efficient operations drive production growth and resilient returns.
Canadian Natural Resources Limited (CNQ - Free Report) is among Canada’s largest independent energy producers, with a diversified portfolio of crude oil, natural gas and natural gas liquids. Its operations span Western Canada, the North Sea and offshore West Africa, built over decades of disciplined growth and financial strength. Anchored by a long-life, low-decline asset base, the company generates reliable cash flows and maintains flexibility in capital allocation. A balanced mix of light and heavy oil, bitumen, synthetic crude and natural gas ensures resilience across cycles. In contrast, oil sands, and thermal and recovery projects reinforce its standing as a leading global independent company.
Canadian Natural has built scale over decades, balancing growth with disciplined financial management and a strong commitment to safe and efficient operations. However, as with any investment, it is essential to take a closer look at the company’s current standing in terms of its resilience, growth trajectory and operational strength. Therefore, let us dig deeper into the prospects to determine Canadian Natural’s credibility.
CNQ Performance Overview
In the past six months, Canadian Natural’s shares have gained 18.5%, outperforming the Oil & Gas Drilling sub-industry’s growth of 16.6% and the broader oil and energy sector's rise of 6.6%. Peer comparison further highlights the strength, as ARC Resources Ltd. (AETUF - Free Report) and Baytex Energy Corp. (BTE - Free Report) gained 10.6% and 6.8%, respectively, while Gran Tierra Energy Inc. (GTE - Free Report) fell 4% during the same period.
Canadian Natural has maintained its dividend commitment for 25 consecutive years, with a remarkable 21% compounded annual growth rate over that period, underpinned by its stable free cash flow. In the second quarter of 2025 alone, the company returned C$1.2 billion in dividends. It declared a quarterly dividend of 58.75 Canadian cents, which implies an annual yield of roughly 5.4%, notably above the Zacks Oil/Energy sector’s average of 3.8% and competitive with its peers like ARC Resources, Baytex Energy and Gran Tierra, which yield an average annual rate of only 2.9%. This highlights not only CNQ’s commitment to shareholder returns but also its capacity to sustain payouts through commodity cycles. Management has always shown a clear prioritization of dividends, even while pursuing opportunistic acquisitions.
CNQ’s Strategic Acquisitions
Canadian Natural has built a strong track record of prudent, well-timed and accretive acquisitions that have consistently strengthened its competitive edge against peers such as ARC Resources, Baytex Energy and Gran Tierra, while diversifying its portfolio and bolstering its financial performance. Landmark deals include the 2017 purchase of the Athabasca Oil Sands Project (AOSP) for $8.5 billion, which added significant value to its asset base and strengthened long-term cash flow generation, as well as the $807 million acquisition of Pelican Lake heavy oil assets and the 2019 buyout of Devon Canada, which further expanded its oil sands footprint. The acquisition of Painted Pony Energy reinforced its natural gas position.
At the same time, recent deals — such as the Palliser Block, which added about 1.1 million net acres and 850 drilling locations, and Montney assets, contributing about 32,000 barrels of oil equivalent per day (BOE/d) production and 120,000 net acres — provide immediate production, reserves growth and strong synergies with existing operations. Together, these acquisitions enhance inventory depth, improve capital efficiency and position Canadian Natural for sustainable free cash flow growth and resilient shareholder returns.
Low Breakeven Oil Price
Canadian Natural’s disciplined capital management and efficient operations support one of the top-tier breakeven oil prices in the sector, with West Texas Intermediate/WTI breakeven levels in the low-to-mid $40 per barrel. This cost structure allows the company to cover maintenance capital and dividends even in weaker commodity price environments, ensuring consistent cash flow generation. By maintaining a long-life, low-decline production base and implementing continuous cost reduction initiatives, Canadian Natural enhances resilience against oil price volatility. This strong margin protection not only safeguards shareholder returns during downturns but also provides significant leverage to upside pricing.
Consistent Production Fueling Growth
Canadian Natural’s consistent production growth underscores its strong value proposition for investors. In the second quarter of 2025, the company delivered an average production of about 1.42 million BOE/d, representing a 10.5% increase from the prior-year levels, despite the impact of a major turnaround at AOSP. This growth was driven by a combination of organic developments and recent accretive acquisitions that added significant reserves inventory.
The company’s multilateral drilling program has further boosted heavy oil output, while Duvernay assets have exceeded expectations with improved efficiencies and cost reductions. Oil Sands Mining and Upgrading also achieved record utilization, averaging about 602,000 barrels per day in July with a 106% upgrader efficiency. With a diversified portfolio and decades of high-return drilling inventory, CNQ is well-positioned to sustain production growth while maximizing long-term shareholder value.
Final Verdict on CNQ Stock
The Zacks Rank #1 (Strong Buy) company is a best-in-class energy producer with strong free cash flow, low breakeven costs and a diversified portfolio that ensures resilience across cycles. Its 25-year dividend track record, accretive acquisitions, consistent production expansion, compelling yield and clear upside potential highlight a proven ability to deliver value through both upturns and downturns. With shares already up 18.5% in the last six months — outpacing peers like ARC Resources, Baytex Energy and Gran Tierra and the broader energy sector — the stock reflects investor confidence in its growth trajectory. Therefore, for investors seeking reliable income and long-term growth, Canadian Natural stock is worth buying.
Image: Shutterstock
Should You Add Canadian Natural Stock to Your Portfolio Now?
Key Takeaways
Canadian Natural Resources Limited (CNQ - Free Report) is among Canada’s largest independent energy producers, with a diversified portfolio of crude oil, natural gas and natural gas liquids. Its operations span Western Canada, the North Sea and offshore West Africa, built over decades of disciplined growth and financial strength. Anchored by a long-life, low-decline asset base, the company generates reliable cash flows and maintains flexibility in capital allocation. A balanced mix of light and heavy oil, bitumen, synthetic crude and natural gas ensures resilience across cycles. In contrast, oil sands, and thermal and recovery projects reinforce its standing as a leading global independent company.
Canadian Natural has built scale over decades, balancing growth with disciplined financial management and a strong commitment to safe and efficient operations. However, as with any investment, it is essential to take a closer look at the company’s current standing in terms of its resilience, growth trajectory and operational strength. Therefore, let us dig deeper into the prospects to determine Canadian Natural’s credibility.
CNQ Performance Overview
In the past six months, Canadian Natural’s shares have gained 18.5%, outperforming the Oil & Gas Drilling sub-industry’s growth of 16.6% and the broader oil and energy sector's rise of 6.6%. Peer comparison further highlights the strength, as ARC Resources Ltd. (AETUF - Free Report) and Baytex Energy Corp. (BTE - Free Report) gained 10.6% and 6.8%, respectively, while Gran Tierra Energy Inc. (GTE - Free Report) fell 4% during the same period.
CNQ, AETUF, BTE & GTE’s Six-Month Stock Performance
Image Source: Zacks Investment Research
CNQ's Dividend Advantage
Canadian Natural has maintained its dividend commitment for 25 consecutive years, with a remarkable 21% compounded annual growth rate over that period, underpinned by its stable free cash flow. In the second quarter of 2025 alone, the company returned C$1.2 billion in dividends. It declared a quarterly dividend of 58.75 Canadian cents, which implies an annual yield of roughly 5.4%, notably above the Zacks Oil/Energy sector’s average of 3.8% and competitive with its peers like ARC Resources, Baytex Energy and Gran Tierra, which yield an average annual rate of only 2.9%. This highlights not only CNQ’s commitment to shareholder returns but also its capacity to sustain payouts through commodity cycles. Management has always shown a clear prioritization of dividends, even while pursuing opportunistic acquisitions.
CNQ’s Strategic Acquisitions
Canadian Natural has built a strong track record of prudent, well-timed and accretive acquisitions that have consistently strengthened its competitive edge against peers such as ARC Resources, Baytex Energy and Gran Tierra, while diversifying its portfolio and bolstering its financial performance. Landmark deals include the 2017 purchase of the Athabasca Oil Sands Project (AOSP) for $8.5 billion, which added significant value to its asset base and strengthened long-term cash flow generation, as well as the $807 million acquisition of Pelican Lake heavy oil assets and the 2019 buyout of Devon Canada, which further expanded its oil sands footprint. The acquisition of Painted Pony Energy reinforced its natural gas position.
At the same time, recent deals — such as the Palliser Block, which added about 1.1 million net acres and 850 drilling locations, and Montney assets, contributing about 32,000 barrels of oil equivalent per day (BOE/d) production and 120,000 net acres — provide immediate production, reserves growth and strong synergies with existing operations. Together, these acquisitions enhance inventory depth, improve capital efficiency and position Canadian Natural for sustainable free cash flow growth and resilient shareholder returns.
Low Breakeven Oil Price
Canadian Natural’s disciplined capital management and efficient operations support one of the top-tier breakeven oil prices in the sector, with West Texas Intermediate/WTI breakeven levels in the low-to-mid $40 per barrel. This cost structure allows the company to cover maintenance capital and dividends even in weaker commodity price environments, ensuring consistent cash flow generation. By maintaining a long-life, low-decline production base and implementing continuous cost reduction initiatives, Canadian Natural enhances resilience against oil price volatility. This strong margin protection not only safeguards shareholder returns during downturns but also provides significant leverage to upside pricing.
Consistent Production Fueling Growth
Canadian Natural’s consistent production growth underscores its strong value proposition for investors. In the second quarter of 2025, the company delivered an average production of about 1.42 million BOE/d, representing a 10.5% increase from the prior-year levels, despite the impact of a major turnaround at AOSP. This growth was driven by a combination of organic developments and recent accretive acquisitions that added significant reserves inventory.
The company’s multilateral drilling program has further boosted heavy oil output, while Duvernay assets have exceeded expectations with improved efficiencies and cost reductions. Oil Sands Mining and Upgrading also achieved record utilization, averaging about 602,000 barrels per day in July with a 106% upgrader efficiency. With a diversified portfolio and decades of high-return drilling inventory, CNQ is well-positioned to sustain production growth while maximizing long-term shareholder value.
Final Verdict on CNQ Stock
The Zacks Rank #1 (Strong Buy) company is a best-in-class energy producer with strong free cash flow, low breakeven costs and a diversified portfolio that ensures resilience across cycles. Its 25-year dividend track record, accretive acquisitions, consistent production expansion, compelling yield and clear upside potential highlight a proven ability to deliver value through both upturns and downturns. With shares already up 18.5% in the last six months — outpacing peers like ARC Resources, Baytex Energy and Gran Tierra and the broader energy sector — the stock reflects investor confidence in its growth trajectory. Therefore, for investors seeking reliable income and long-term growth, Canadian Natural stock is worth buying.
You can see the complete list of today’s Zacks #1 Rank stocks here.