Why I'm Waiting to Buy Canadian Natural Resources Stock
So here’s the situation with Canadian Natural Resources, or CNQ as it’s listed on the NYSE. This is a company that has caught my attention like very few others in the market. Over the past 24 years, its dividend has exploded by more than 9,300%, and it currently offers a yield that’s more than four times the average S&P 500 company. On top of that, the company has been increasing its dividend by an average of 21% per year this century, sometimes even multiple times a year. And yet, despite all this, I’m holding off on buying shares for a few months—and here’s why.
The company itself is incredibly strong. A decade ago, it weathered a massive oil market crash, when prices plunged 70% from their peak, and came out even stronger. Back then, it not only maintained and even boosted its dividend but also made smart acquisitions, which positioned it for growth once oil prices recovered. Today, Canadian Natural Resources is still well-managed, with low operating costs of about $21 per barrel and $4.3 billion in liquidity. This gives it a huge buffer to survive downturns and even expand during market slumps.
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But despite all these strengths, I’m expecting the short term to be rough. Oil prices have already dropped about 10% over the past three months, and that’s despite major geopolitical events that would normally push prices higher. Things like sanctions on Venezuelan oil, conflicts in Ukraine, and rapid U.S. economic growth would normally boost oil prices. However, technology is changing the game. AI has allowed oil production to skyrocket while reducing costs across the board. Equipment failures are predicted more accurately, well construction is expedited, and even seismic analysis has been accelerated. Big oil companies like Aramco, ExxonMobil, and Devon Energy are reporting billions in savings and efficiency gains from AI alone.
What this means is that even though rig counts in the U.S. have dropped dramatically, production continues to rise, smashing previous records. This flood of supply, combined with a less powerful OPEC and potential easing of sanctions on Russian oil if geopolitical tensions ease, suggests that oil prices could remain under pressure through early 2026.
So while Canadian Natural Resources is a powerhouse and could turn a market slump into a strategic advantage, I expect shares to trend lower in the coming months. History shows that buying during such dips can be highly rewarding, but patience is required. For me, waiting a few months could present an ideal opportunity to buy into a stock that not only pays an exceptional dividend but is also well-positioned to thrive in the long term.
In short, CNQ is a stock I want in my portfolio, but timing matters. The short-term volatility might be uncomfortable, yet it’s likely setting the stage for a much stronger position once the market stabilizes. Patience here could pay off handsomely.
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