CNQ's management prioritizes maximizing shareholder value through efficient capital allocation in the form of debt reduction, dividend hikes, and timely share repurchases. With a 5-year dividend growth rate of 22% and frequent increases, CNQ offers a compelling combination of growth, yield, and safety. Share repurchases at favorable valuations enhance earnings per share and future dividend safety, reflecting management's confidence in CNQ's current valuation.
Canadian Natural Resources boasts a nearly $70 billion market cap, a 5% dividend yield, and strong cash flow supporting substantial shareholder returns. The company has over 10 billion barrels of reserves, producing 1.1 million barrels/day, making it Canada's largest crude oil and second-largest natural gas producer. The 2025 budget includes $6 billion in spending, focusing on oil and gas drilling, with expected production per share growth of 14%.
The Trump administration's policies have created uncertainty for some sectors, but I see long-term value in the overlooked opportunities they present. By focusing on neglected, high-potential investments, I identify stocks suffering from policy-driven sentiment but primed for future growth. Despite short-term market reactions, these stocks are poised for significant returns. Their resilience and unique positions make them attractive for investors with a long-term outlook.
Canadian Natural Resources Limited will achieve double-digit production growth in 2025 through M&A and organic investments, making it a standout in the low-growth energy sector. Political changes in the US and Canada could favorably impact Canadian Natural Resources, potentially boosting revenues and reducing operational risks. The company's valuation is highly attractive, with a forward EV/EBITDA multiple under 6 and a dividend yield around 5%, making it a compelling buy.
CNQ's C$6B operating capital budget is set to drive 12% growth in production and boost investments and shareholder returns.
As Canada transitions to new leadership post Trudeau's exit, investors should keep a watch on stocks like SU, CNQ and IMO.
CNQ offers a diversified portfolio and strong cash flow but faces risks from commodity price volatility, pipeline constraints and increasing regulatory scrutiny.
There is always something on sale, with now being a good time to pick up select names in the energy sector for high yields and value. Cenovus Energy is a Canadian oil and gas giant with integrated operations, offering strong cash flows, disciplined capital allocation, and robust capital returns to shareholders. Plains All American is a large midstream company with extensive infrastructure, strong operational efficiencies, and high yields, benefiting from growth in Permian Basin volumes.
For those looking to balance their portfolios with reliable income-generating assets, large-cap energy stocks like CNQ, CVX and KMI are solid choices.
The energy sector's underperformance presents an opportunity to buy undervalued stocks, with Canadian Natural Resources and Helmerich & Payne offering compelling upside potential. CNQ benefits from long reserve life, low production costs, and shareholder-friendly management, making it a strong investment despite regulatory challenges. HP's acquisition of KCA Deutag enhances its international presence and potential for significant debt reduction, positioning it as a higher-risk, high-reward investment.
Canadian Natural Resources Limited has consistently performed well, but its post-pandemic valuation was too high for our taste. On the previous coverage, we had suggested a covered call as an alternative to paying up for the company. We analyze that trade and the current valuations.
The art of stock picking has a lot in common with the art of gift giving. I apply the art of gift giving to selecting great investments for loved ones. I share the three that I would pick right now.