A hot dividend stock corrected 13.2% in the first week of November, offsetting its inflated October prices. Canadian Natural Resources ( TSX: CNQ ) stock fell as oil prices corrected sharply by 17.5% amid recent developments in US politics. U.S.
President Donald Trump lost the mid-term elections, giving Democrats a strong hold on future US policies. However, it is unlikely to slow down Trump. In fact, he plans to use executive authority with even greater force, so says an article on CNN.
He did the same in his previous term, using veto power to block Chinese companies from acquiring US companies or supplying communication equipment to the US government. In his current term, Trump imposed even bigger retaliatory tariffs after the US Supreme Court ruled his previous tariffs invalid. Source: Getty Images Should you buy Canadian Natural Resources at the current dip?
The recent dip can be considered a good opportunity to buy Canadian Natural Resources ahead of Trump uncertainty. Trump loves oil, and higher oil prices have been bringing in good money for America, the largest producer of oil. I won’t call mid-term elections the end of the energy upcycle.
In December 2025, just when oil prices returned to a little above US$60/barrel, 2026 disrupted the supply chain with the Venezuela crisis and the US-Iran war. What will come next is difficult to anticipate, but energy will be the focus point. Even if it is the end of the energy upcycle, Canadian Natural Resources is at a sweet spot to earn you growing quarterly dividends.
Canadian Natural Resources integrates dividends into its breakeven price of mid-$40 per barrel. The breakeven price includes maintenance and dividend costs. The company maintains its dividend growth by reducing its share count through buybacks.
It increases its adjusted funds flow from operations (AFFO) by increasing production. Its payout ratio is 30% of AFFO during the upcycle even after increasing dividends. This is because the company keeps increasing its AFFO by growing production.
Canadian Natural Resources has reduced its net debt to $12 billion by increasing its cash reserves by almost $2 billion since June 30, 2026. As its net debt is below the $13 billion target, it intends to use 100% of free cash flow to buy back shares. The company anticipates buying back $1.6 billion worth of shares in November and December, up from $3.8 billion in the 10 months of 2026.
These buybacks will help slow the decline in AFFO from falling oil prices and leave room to grow dividends by double digits in March 2027. How much to invest in Canadian Natural Resources for $200 a quarter in dividends Canadian Natural Resources is a stock to own for its average annual dividend growth rate of 21%. Assuming the company grows its dividend annually by 10%, you can earn a sizeable dividend.
Suppose you have a target to earn a $200 quarterly dividend. It could be achieved immediately by buying 320 shares for $21,760. However, if your target is long-term , say five years from now, you could consider buying 199 shares for $13.53.
Assuming the dividend per share grows by 10% annually, a $2.50 dividend could grow to $4.03 by 2031. With a $4.03 annual dividend per share, 199 shares could give you $800 annually or $200 quarterly. Purchase price Investment Amount in Nov 2026 Number of shares purchased in Nov 2026 Year of Dividend Dividend per share Annual Dividend Quarterly Dividend $68 $21,760 320 2026 $2.50 $800.00 $200.00 2027 $2.75 2028 $3.03 2029 $3.33 2030 $3.66 $13,532 199 2031 $4.03 $801.23 $200.31 Note that with shares, all expectations are subject to review.
Any material change in the company’s circumstances could alter the dividend expectations. When that happens, you also have to change your portfolio strategy. For instance, long-term investors stayed invested in Enbridge for the double-digit dividend growth.
However, the pandemic changed the circumstances, and the events that followed pushed for capital spending, slowing dividend growth to 3%. The dividend growth rate has stayed at 3% since 2020. Enbridge is a perfect example that past performance does not guarantee future returns.
Hence, review your stock portfolio to see if there are any material, long-term changes that have altered your expectations for the stock.
Source: The Motley Fool Canada
