1 Canadian Dividend Stock Down 13% to Buy and Hold Forever

With many top dividend payers in sectors such as banking, energy, utility, and materials trading near their highs, finding undervalued opportunities has become challenging.

However, shares of a few high-quality Canadian stocks with a solid dividend record have pulled back a bit. This provides an opportunity to buy and hold these top dividend payers forever at a more attractive valuation.

One such top Canadian dividend stock is Canadian Natural Resources (TSX:CNQ). Shares of the oil and gas company have fallen more than 13% over the past month and are trading roughly 20% below their 52-week high of $70.99.

Canadian Natural has raised its dividend for 26 years in a row

Canadian Natural Resources is one of the most dependable dividend stocks. While the energy sector often witnesses sharp swings in commodity prices, the company has consistently rewarded investors by growing its dividend through multiple market cycles. Its solid payouts highlight the resilience of its business model and financial strength.

Most recently, Canadian Natural raised its annualized dividend to $2.50 per share, extending its dividend growth streak to 26 consecutive years. Moreover, Canadian Natural’s dividend has grown at a 20% compound annual growth rate (CAGR) over that period, reflecting the company’s ability to generate strong and sustainable free cash flow.

The oil and gas producer’s payouts are driven by its portfolio of long-life, low-decline assets. These assets require relatively little reinvestment to maintain production, allowing the company to generate healthy cash flows even during periods of lower commodity prices. This financial strength also gives Canadian Natural the flexibility to pursue acquisitions, reduce debt, and continue returning capital to shareholders through higher dividends.

Canadian Natural currently pays a quarterly dividend of $0.63 per share, yielding about 4.4%.

Canadian Natural is built to keep growing its dividend

Canadian Natural appears well-positioned to continue raising its dividend for years to come, supported by strong cash generation, a resilient portfolio of long-life assets, and a disciplined approach to capital allocation.

The company’s financial performance remains robust. In the first quarter of 2026, Canadian Natural generated adjusted net earnings of $2.4 billion, while adjusted funds flow reached $4.4 billion. The strong cash generation enabled the company to return approximately $1.5 billion to shareholders during the quarter, including $1.2 billion in dividends and $300 million through share repurchases.

Looking ahead, its diversified portfolio of long-life, low-decline assets provides stable production, while its extensive infrastructure ownership in key operating regions helps control costs, improve market access, and enhance operational efficiency. These advantages strengthen the company’s ability to fund dividends, maintain a healthy balance sheet, and pursue value-accretive acquisitions when opportunities arise.

The company’s low-cost operating model further strengthens its dividend outlook. Low maintenance capital requirements and competitive break-even costs support consistent free cash flow generation, even during periods of weaker oil and natural gas prices.

Canadian Natural’s massive proved reserves also support its long-term investment case. In addition, its extensive undeveloped land position provides ample opportunities to expand production over time.

Overall, Canadian Natural is well-positioned to continue generating substantial free cash flow, supporting future dividend increases.

The post 1 Canadian Dividend Stock Down 13% to Buy and Hold Forever appeared first on The Motley Fool Canada.

Should you invest $1,000 in Canadian Natural Resources right now?

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 10 percentage points.*

They revealed what they believe are 10 TSX Stocks for 2026… and Canadian Natural Resources made the list – but there are 9 other stocks you may be overlooking.

Don’t miss out on our Top 10 TSX Stocks for 2026, available when you join our mailing list!

Get the 10 stocks instantly #start_btn5 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn5 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn5 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn5 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of July 6th, 2026

More reading

• A 3-Stock TFSA Game Plan for the Rest of 2026
• 5 TSX Dividend Stocks With Solid Yields Built for Steady Cash Flow in Any Market
• Canadian Companies With a Track Record of Consistently Raising Their Dividends
• Canadian Stocks to Own as Inflation Stages a Comeback
• 1 Canadian Dividend Stock Down 16% to Buy and Hold Forever

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy.