Is it a good company at a reasonable price? As I have reported recently, I have more shares in this company, but with fooling around money mostly. This is a resource stocks and I have little in resource stocks, around 1% of my portfolio. Now they are putting some of my utilities into Energy sections, but I have not moved my utilities into these sectors. This would move my resource investments to the 10% mark.
I own this stock of Canadian Natural Resources (TSX-CNQ, NYSE-CNQ). I first bought CNQ in September 2012 because the dividend yield was relatively high. The 5 and 10 year median dividend yields were 0.73% and 0.75%. The current one was at 1.31% and I got it with a yield of 1.32%. In April 2013 I bought more shares of this stock because the yield is now at 1.54%. I bought another 100 shares in 2020 because the yield was 11.63%. I bought more shares recently as the yield is now in the 5% range.
When I was updating my spreadsheet, I noticed that I have made a total return of 13.97% per year to date with 12.27% from capital gains and 1.70% from dividends. I recently bought more shares in this company even thought I did buy it as a tracking stock.
I noticed that both the CEO and Chairman bought stock last year. No others that I follow bought stock. I know INK shows a lot of sales, but it is just insiders not picking up options. In 2024, the company did a 2 for 1 stock split.
If you had invested in this company in December 2014, for $1005.76 you would have bought 56 shares at $17.96 per share. In December 2024, after 10 years you would have received $637.21 in dividends. The stock would be worth $2,485.28. Your total return would have been $3,122.49. This would be a total return of 13.11% per year with 9.47% from capital gain and 3.64% from dividends. Note that so far this stock has fallen in price by 10% in these unstable times. This calculation takes into consideration stock splits, which means that the original cost would be lowered by these splits.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.96 | $1,005.76 | 56 | 10 | $637.21 | $2,485.28 | $3,122.49 |
The current dividend yield is good with dividend growth high. The current dividend yield is good (5% to 6% ranges) at 5.89%. The 5 and 10 year median dividend yields are moderate (3% to 4% ranges) at 4.38% and 3.92%. The historical median dividend yield is low (below 2%) at 1.35%. The dividend yields on this stock was low until 2014 and then the yield started to climb (as did the Payout Ratio). The dividend growth is good (15% per year or above) at 23% per year over the past 5 years. The last dividend increase was in 2025 and it was for 4.4%. This was the second rise this year, the other one was for 7.14%.
The Dividend Payout Ratios (DPR) need some improvement and analysts expect this to happen. The DPR for 2024 for Earnings per Share (EPS) is too high at 73% with 5 year coverage at 59%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is too high at 60% with 5 year coverage at 54%. It is better if this is in the 40% range or lower. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 31% with 5 year coverage at 28%. The DPR for 2024 for Free Cash Flow (FCF) is too high at 50% with 5 year coverage is fine at 39%. Here again there is no agreement on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 72.81% | 59.15% |
| AEPS | 59.97% | 54.11% |
| CFPS | 30.88% | 28.18% |
| FCF | 49.87% | 39.20% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is good at 0.18 and currently at 0.20. The Liquidity Ratio for 2024 is too low at 0.77 and 0.77 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.71 and currently at 1.85. The Debt Ratio for 2024 is good at 1.86 and 1.86 currently. The Leverage and Debt/Equity Ratios for 2024 are fine at 2.16 and 1.16 and currently at 2.16 and 1.16.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.18 | 0.20 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 0.77 | 0.77 |
| Liq. + CF | 1.71 | 1.85 |
| Debt Ratio | 1.86 | 1.86 |
| Leverage | 2.16 | 2.16 |
| D/E Ratio | 1.16 | 1.16 |
The Total Return per year is shown below for years of 5 to 34 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 23.24% | 21.86% | 16.14% | 5.72% |
| 2014 | 10 | 16.84% | 13.11% | 9.47% | 3.64% |
| 2009 | 15 | 22.11% | 8.20% | 5.82% | 2.38% |
| 2004 | 20 | 20.87% | 8.34% | 6.41% | 1.93% |
| 1999 | 25 | 22.36% | 11.63% | 9.68% | 1.95% |
| 1994 | 30 | 13.25% | 11.45% | 1.80% | |
| 1990 | 34 | 19.30% | 16.89% | 2.40% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 6.54, 7.84 and 9.14. The corresponding 10 year ratios are 6.59, 7.90 and 9.22. The corresponding historical ratios are 10.26, 9.36 and 16.23. The current ratio is 10.70 based on a stock price of $40.66 and EPS estimate for 2025 of $3.80. The ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 5.57, 6.67 and 8.55. The corresponding 10 year ratios are 9.17, 10.91 and 12.66. The corresponding historical ratios are 9.33, 11.64 and 15.97. The current P/AEPS Ratio is 11.82 based on a stock price of $40.66 and AEPS estimate for 2025 of $3.44. The current ratio is between the median and high ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 3.62,584 and 6.73. The corresponding 10 year ratios are 5.78, 5.97 and 7.13. The corresponding historical ratios are 4.46, 6.05 and 7.46. The current P/AEPS Ratio is 6.00 based on a stock price of $40.66, AFFO estimate for 2025 of $14,513M, and AFFO per Share of $6.78. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $38.11. The 10-year low, median, and high median Price/Graham Price Ratios are 0.81, 1.00 and 1.19. The current P/GP Ratio is 1.07 based on a stock price of $40.77. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.47. The current P/B Ratio is 2.17 based on a stock price of $40.66, Book Value of $39,468M and Book Value per Share of $18.77. The current ratio is 47% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2025 of $19.27. This implies a ratio of 2.11 based on a stock price of $40.66 and Book Value of $40,524M. This ratio is 43% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 6.63. The current ratio is 5.57 based on Cash Flow per Share estimate for 2025 of $7.30, Cash Flow of $15,348M and a stock price of $40.66. This ratio is 16% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 1.35%. The current dividend yield is 5.78% based on dividends of $2.35 and a stock price of $40.66. The current yield is 328% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 3.92%. The current dividend yield is 5.78% based on dividends of $2.35 and a stock price of $40.66. The current yield is 47% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
The 10-year median Price/Sales (Revenue) Ratio is 2.13. The current ratio is 2.17 based on a stock price of $40.66, Revenue estimate for 2025 of $38,073M and Revenue per Share of $18.75. The current ratio is 1.8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
Results of stock price testing is that the stock price is probably reasonable, and maybe cheap. The 10 year median dividend yield is saying that the stock price is relatively cheap. The P/S Ratio test says that the stock price is relatively reasonable, but above the median, but only by 1.8%. A lot of the testing is saying that the stock price is reasonable but above the median or it is relatively expensive.
When I look at analysts’ recommendations, I find Strong Buy (8), Buy (6) and Hold (7). The consensus would be a Buy. The 12 month stock price consensus is $50.53, with a high of $63.00 and low of $40.00. The current stock price consensus of $50.53 implies a total return of 30.05% with 24.27% from capital gains and 5.78% from dividends.
Analysts on Stock Chase are mostly positive about this stock, and the oil business but a few are concerned about a Liberal win and little clarity for the business. Andrew Walker Motley Fool likes the companies yield and dividend growth record. Puja Tayal on Motley Fool writes about 10 energy stocks to invest in and this one is at the top of his list. The company has a press release on Energy Now about their fourth quarter of 2024 results.
Vardah Gill on Insider Monkey says this stock is a safe dividend stock with a yield over 5%. Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has one warning on this stock of has a high level of debt.
Canadian Natural Resources Ltd is an independent crude oil and natural gas exploration, development, and production company. The company's exploration and production operations are focused in North America, largely in Western Canada; the United Kingdom (UK) portion of the North Sea; and Cote d'Ivoire in Offshore Africa. Its web site is here Canadian Natural Resources .
The last stock I wrote about was about was South Bow Corp (TSX-SOBO, NYSE-SOBO) ... learn more. The next stock I will write about will be Barclays PLC ADR (LSE-BARC, NYSE-BCS) ... learn more on Monday, April 28, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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