If you're an investor eyeing the Canadian stock market, chances are you've come across Canadian Natural Resources (TSX:CNQ) as a potential investment option. CNQ has been a standout performer on the TSX over the past two decades, delivering impressive returns to shareholders and offering a compelling dividend yield. But is CNQ stock still a good buy in today's market environment? Let's take a closer look.

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Understanding Canadian Natural Resources (TSX:CNQ)

Canadian Natural Resources is one of Canada's largest energy companies, boasting a market capitalization of over $105 billion. The company operates a diverse portfolio of assets both domestically and internationally, focusing on the exploration, development, and production of crude oil, bitumen, natural gas, and natural gas liquids. With a strong foothold in the TSX energy sector, CNQ has established itself as a key player in the Canadian economy.

Analyzing CNQ's Performance Over Time

CNQ's performance over the past two decades has been nothing short of remarkable. With returns approaching 1,000% and total returns, including dividends, surpassing 1,730%, CNQ has outpaced the broader markets by a wide margin. Despite its cyclical nature, CNQ has consistently delivered value to shareholders, making it a favorite among dividend investors.

Bull Case for CNQ Stock

One of the key strengths of CNQ lies in its robust asset base, characterized by long-life, low-decline production assets. The company's focus on high-value synthetic crude oil (SCO) production from oil sands mining and upgrading operations, combined with top-tier thermal in situ oil sands assets, ensures sustainable adjusted funds flow across commodity price cycles. Despite challenges in the macro environment, CNQ has maintained a strong balance sheet, provided significant returns to shareholders, and strategically developed its assets.

CNQ's Performance in 2023

In 2023, CNQ reported impressive financial results, including net earnings of $8.2 billion and operating cash flow of $12.4 billion. With adjusted funds flow totaling $15.3 billion and free cash flow of $6.9 billion, CNQ demonstrated its ability to generate substantial cash returns. Moreover, the company's prudent approach to debt reduction and shareholder distributions highlights its commitment to long-term value creation.

Conclusion

With a forward yield of over 4% and a track record of dividend growth spanning 24 consecutive years, CNQ remains an attractive investment option for income-oriented investors. Priced at a modest 13.2 times forward earnings and trading at a marginal discount to consensus price targets, CNQ stock presents an opportunity for value-conscious investors to capitalize on its growth potential and dividend stability.