How CNQ Turned Dividend Discipline Into Long-Term Strength

Canadian Natural Resources Limited (CNQ) continues to show how disciplined capital allocation can drive steady shareholder value. The company has increased its dividend for 25 straight years — one of the longest streaks in global oil and gas. Since 2001, CNQ’s dividend has seen a compound annual rate of about 21%, reflecting a long-standing commitment to returning capital through both strong and weak commodity environments.

In the first nine months of 2025, CNQ returned over C$6 billion to its shareholders through dividends and buybacks. Its dividend progression remains notable, rising from C$1.775 per share in 2023 to C$2.075 in 2024, and reaching an annualized C$2.35 in 2025. This steady rise highlights the company’s ability to support and grow payouts even when energy prices soften.

Cost discipline and balanced spending have helped CNQ maintain these returns while keeping its balance sheet healthy. After net debt falls to its C$12 billion target, the company plans to return 100% of free cash flow to its shareholders — a clear extension of its disciplined, shareholder-first strategy.

This consistent dividend framework has become a defining feature of CNQ. Rather than chasing aggressive growth, the company prioritizes reliable, long-term returns. Backed by resilient free cash flow and solid operations, CNQ’s dividend track record underscores how it has become one of the sector’s most stable operators, turning capital discipline into a key competitive strength.

Canadian Energy Operators With Dividend Strength in Focus

Baytex Energy (BTE) maintains a careful dividend approach centered on debt reduction and sustainable long-term returns. The company directs all free cash flow to paying down debt after funding its quarterly dividend, with long-term plans for steady payout growth supported by opportunistic buybacks.

Cenovus Energy (CVE) has also built a strong dividend reputation, targeting the return of essentially all excess free funds flow while sustaining payouts even at $45 WTI. With five consecutive years of double-digit base dividend growth, Cenovus continues to reward shareholders with consistent, disciplined returns.

The Zacks Rundown on Canadian Natural Resources

Shares of CNQ have gained 7% in the past three months compared with the Oil/Energy sector’s increase of just over 3%.

From a valuation perspective — in terms of forward price-to-earnings ratio — Canadian Natural Resources is trading at a premium compared with the industry average.

See how the Zacks Consensus Estimate for CNQ’s earnings has been revised over the past 60 days.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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