Valued on a market capitalization of $ 91 billion, Canadian natural resources (TSX: CNQ) is a heavyweight energy that has generated inflation-knocking returns for long-term shareholders. In the past 20 years, CNQ shares have returned 222% to investors. However, if we adapt for reinvestations of dividends, the cumulative returns are closer to 474%, compared to the TSX index returns of “only” 288%.
It means that an investment of $ 1,000 in the TSX shares in September 2005 would currently be worth nearly $ 5,730%. Despite this outperformance, CNQ shares has fallen by 23% compared to all time, so that you can buy the dip and benefit from a tasty yield of more than 5%.
Is this TSX dividend share a good purchase at the moment?
In the second quarter (Q2) of 2025, the Canadian natural resources reported an adapted fund flow of $ 3.3 billion, while the adjusted net income was $ 1.5 billion. Production reached 1.42 million barrels of oil equivalent (BOE) per day in Q2, an increase of 135,000 BOE daily from the previous year, driven by strategic acquisitions and organic growth.
The ability of CNQ to complete the Athabasca Oil Sands Project (AOSP) reversal five days earlier than planned while retaining strong production in its diversified asseti base shows operational excellence.
The AOSPSMEMEER temporarily lowered the output by 120,000 barrels per day. The production in July, however, strongly bounced back to 602,000 barrels per day, where upgrader use hit 106%.
The company’s acquisition strategy continues to deliver value, with two recent deals that add 82,000 BOE per day of production and around 1,000 high -quality drill locations. The Palliser Block Acquisition, postponed until the end of June because of the legal assessment, and the acquisition of the Grand Prairie Montney of July for $ 750 million, shows Canadian Natural’s assets to identify accretive opportunities that immediately contribute to the cash flow.
CNQ returned $ 1.6 billion to shareholders in Q2, consisting of $ 1.2 billion in dividends and $ 400 million in share purchasing. In the first six months of 2025, the energy soul weight has returned $ 4.6 billion to shareholders, which presents his commitment to capital discipline.
CNQ maintains its leading breathing life of $ 40-45 West Texas Intermediate, while focusing on comparable returns from 2025 to those of 2024, despite the fact that only 60% of the free cash flow is assigned to returns, at 100% earlier.
The Duvernay activities of Canadian Natural have achieved $ 60 million in annual savings in the field of operational costs, which exceeds the original target of $ 40 million. In addition, the drilling and completion costs improved by 16% on an annual basis. Heavy oil multilateral drilling programs added 26 extra wells that go beyond the original plans, which indicates the profit of capital efficiency.
Is CNQ -shares undervalued?
CNQ’s balanced portfolio over oil manden, heavy oil, light oil and natural gas ensures flexibility in raw material cycles. With a net debt of less than $ 17 billion and a strong liquidity of $ 4.8 billion, Canadian Natural maintains financial flexibility as they pursue organic growth and acquisitions that are expected to stimulate long -term value creation in the long term.
Analysts who keep CNQ sharing forecast forecast, adapted profit per share to expand from $ 3.46 in 2024 to $ 7.71 in 2029. A larger profit base should enable CNQ to increase the annual dividend per share of $ 2.13 in 2027 in 2027.
If CNQ shares are priced at a profit of 10 times, this would have to trade around $ 77 in early 2029, which indicates an upward potential of 75%. If we adapt for dividends, cumulative returns can be closer to 95%.
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