Canadian Natural Resources Ltd. (CNQ) has demonstrated remarkable growth, with its stock price soaring nearly 200% over the past five years. But what can investors expect for CNQ in 2025?
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CNQ is Backed by Top-Tier Assets
As a leading oil and gas producer, CNQ boasts an unmatched asset base characterized by strong and predictable cash flows. Its diversified portfolio includes high-quality natural gas, crude oil, and upgrading assets. With a reserve life index of 44 years, CNQ’s long-life assets require minimal capital investment for exploration, ensuring a reliable cash flow profile. Notably, CNQ has increased its dividend every year for the past 24 years.
TMX Pipeline Commissioning
The recent commissioning of the TMX pipeline marks a significant development for CNQ and the entire oil and gas sector. This pipeline opens Canadian oil and gas to global markets, increasing demand and realized prices for Canadian crude.
Production and Cash Flows Ramp Up
In the latest quarter, CNQ saw an 8% increase in production, while adjusted funds flow surged 32% to $3.6 billion. The first half of the year also showed strong performance, with adjusted funds flow rising 9.4% to $6.8 billion. Low capital intensity resulted in $2 billion in free cash flow, which CNQ plans to return entirely to shareholders through dividends and share buybacks.
Future Opportunities for CNQ
Looking ahead to 2025, CNQ is poised for further growth. Production is expected to rise in late 2024, enhancing free cash flow generation. Additionally, curtailed natural gas production is likely to resume as prices strengthen. The company anticipates adding approximately 12,000 barrels of oil equivalent per day (boe/d) from new projects.
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The Bottom Line
CNQ stock stands out as one of the best energy investments on the TSX. With strong growth prospects and a commitment to shareholder value through dividends and buybacks, CNQ stock is a solid buy for investors seeking long-term gains.
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