Dividend investing primarily requires persistence, and generally, that persistence will get examined. That’s precisely what’s occurring with Canadian Pure Sources (Tsx: cnq) proper now. Regardless of its constant dividend development and steady enterprise mannequin, the inventory has slipped over 17% from its 52-week excessive. It’s not a simple tablet to swallow, however we should not overlook that its long-term fundamentals nonetheless look stable.
In reality, the corporate is producing file volumes, sustaining top-tier operational effectivity, and returning billions to shareholders. Whereas the market would possibly quickly be reacting to short-term pressures, I see this correction as a long-term reward.
On this article, I’ll share why Canadian Pure Sources has turn out to be my prime worth choose proper now and what makes it too engaging to disregard.
My prime worth choose for earnings traders
Being considered one of Canada’s largest vitality firms, Canadian Pure Sources operates in oil sands, pure fuel, and offshore tasks. Primarily based in Calgary, it’s recognized for long-life, low-decline belongings that assist it generate constant money flows. CNQ inventory is at the moment buying and selling at $43.14 per share with a market cap of $90.2 billion. On the brighter aspect, the current decline in its inventory has made its annualized dividend yield look extra engaging, which at the moment stands at 5.5%.
Now, regardless of CNQ inventory being down over 17% from its 52-week excessive, the corporate hasn’t proven any indicators of weak spot. In reality, Canadian Pure Sources reported record-breaking manufacturing within the first quarter of 2025, with its complete output reaching 1.6 million barrels of oil equal per day. That included file quarterly artificial crude oil manufacturing of 595,000 barrels per day with the assistance of excessive utilization at its oil sands operations and strategic upgrades accomplished final yr.
Financials stay robust
The corporate’s first-quarter financials had been simply as spectacular as its operational outcomes. In the course of the quarter, its adjusted earnings got here in at $2.4 billion or $1.16 per share. It additionally reported adjusted funds circulation of $4.5 billion, displaying its skill to constantly generate robust money circulation, even in a barely weaker pricing atmosphere.
Greater manufacturing volumes, higher price management, and powerful realized costs had been among the key elements that helped Canadian Pure Sources publish robust financials final quarter. Its artificial crude bought for over $95 per barrel throughout the quarter, which considerably lifted its margins. In the meantime, decrease vitality prices and excessive utilization drove down its working prices throughout segments, together with a 12% year-over-year drop in its oil sands mining prices and a 20% drop in thermal in-situ operations.
These elements make it much more engaging
In recent times, Canadian Pure Sources has been stepping up manufacturing whereas discovering higher, extra environment friendly methods to function. The corporate lately decreased its 2025 capital funds by $100 million with out chopping into its manufacturing plans. It’s additionally seeing optimistic outcomes from its Duvernay acquisition, the place it expects better-than-planned manufacturing and value financial savings this yr.
As well as, its oil sands mining operations are among the many most cost-effective within the business, with long-life belongings making up nearly all of manufacturing. Briefly, Canadian Pure Sources has the dimensions, money circulation, and operational self-discipline to experience by market cycles — whereas paying traders a rising stream of dividends. These dividends have been elevated for 25 consecutive years. These elements make it my prime worth choose proper now.