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1 Unstoppable Dividend Stock to Buy With $400 Right Now

Alex Smith

Alex Smith

3 hours ago

5 min read 👁 1 views
1 Unstoppable Dividend Stock to Buy With $400 Right Now

Dividend-paying stocks are attractive investments that offer both income and long-term growth. These companies provide regular cash payments that can help cover short-term financial needs. Moreover, by reinvesting the dividends, investors can significantly accelerate their portfolio growth and build wealth over the long run.

Notably, there are high-quality Canadian dividend stocks that deliver more than just reliable payouts. These TSX stocks consistently reward shareholders with both stable income and strong capital appreciation, outperforming the Canadian benchmark index year after year.

Another appealing aspect of investing in equity is accessibility. Building a portfolio of unstoppable dividend stocks does not require a large initial investment. Even a relatively small amount, such as $400, can be enough to begin accumulating shares. Over time, consistent contributions and reinvested dividends can transform a modest starting point into a large investment.

So if you are looking to put $400 to work today, here is an unstoppable dividend stock to buy now.

1 unstoppable dividend stock

Canadian Natural Resources (TSX:CNQ) is an unstoppable dividend stock to consider now. It has consistently paid dividends during all commodity and economic cycles. Notably, most oil and gas producers have reduced or suspended dividends during downturns, but Canadian Natural Resources has continued to raise its payout for decades.

CNQ’s portfolio of long-life, low-decline energy assets and a diversified production base enables it to generate steady cash flow, supporting higher payouts. Its operations span multiple crude oil types, natural gas, and natural gas liquids (NGLs), providing operational flexibility and enabling management to allocate capital toward higher-return opportunities.

CNQ currently pays a quarterly dividend of $0.588 per share, yielding 3.9% at its recent closing price of $60.24. Further, CNQ has increased its dividend for 25 consecutive years. Over that period, the dividend has grown at a compound annual growth rate (CAGR) of 21%. Further, in the first nine months of the current fiscal year, Canadian Natural Resources has returned roughly $4.9 billion to shareholders through dividends.

Canadian Natural has also delivered significant capital gains. Over the past year, Canadian Natural’s shares have gained about 63%, significantly outperforming the S&P/TSX Composite Index, which increased over 36% during the same period. Moreover, in the last five years, its stock has grown at a CAGR of more than 32%, resulting in total capital gains of about 304%.

Why buy Canadian Natural Resources stock now?

While CNQ stock has appreciated significantly, it has room for further upside. Rising crude oil prices, influenced by geopolitical tensions in the Middle East, could support higher revenue and cash flow for the company. In addition, its portfolio of high-quality assets positions it well to benefit from favourable energy market conditions.

Further, its focus on improving cost structures and optimizing production processes augur well for growth even in periods of commodity price volatility. Its strong operating performance will support robust cash generation, driving dividend payments and its share price. Moreover, CNQ’s focus on strategic acquisitions will likely strengthen its asset base and support growth.

In addition, Canadian Natural’s extensive inventory of undeveloped land offers repeatable drilling opportunities, enabling the company to expand production. It will also benefit from a portfolio of relatively low-risk conventional projects. These projects require modest capital investment and can be brought online quickly, allowing the company to generate attractive returns when energy prices are supportive.

Overall, Canadian Natural’s diversified asset base, disciplined cost management, and strong cash flow generation create a solid earnings foundation. These factors position Canadian Natural Resources to sustain dividend growth and potentially outperform the broader Canadian equity market.

The post 1 Unstoppable Dividend Stock to Buy With $400 Right Now appeared first on The Motley Fool Canada.

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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.

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