Canadian investors still have opportunities to scoop up high-quality TSX dividend stocks trading at appealing valuations—ideal additions to a self-directed Tax-Free Savings Account (TFSA) focused on steady income and long-term total returns.
While buying beaten-down stocks can be uncomfortable, contrarian investing often pays off when market sentiment shifts. One such opportunity worth considering today is Canadian Natural Resources.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) currently trades around $45 per share, well below its 2024 peak of $55. The decline largely reflects weaker oil prices, as CNQ is one of Canada’s largest integrated producers of oil and natural gas. Its operations span oil sands, conventional light and heavy oil, offshore production, and vast natural gas assets across Western Canada.
West Texas Intermediate (WTI) crude now sits near US$60 per barrel, down from over US$80 last year. However, with a breakeven range of US$40–45, CNQ remains solidly profitable. In the first nine months of 2025, the company generated adjusted net earnings of $5.7 billion—up from $5.4 billion in the same period last year—demonstrating resilience despite lower prices.
Management continues to boost production through acquisitions and efficient drilling programs. Notably, CNQ’s strong balance sheet allows it to make strategic moves even during downturns, as seen in its US$6.5 billion purchase of Chevron’s Canadian assets last year.
Also Read: Best Canadian Stocks for Dividends
Growth Prospects
Additional oil pipeline capacity could support future growth, with brownfield expansions underway and renewed discussions for a new major pipeline to the coast. On the natural gas side, while oversupply has weighed on domestic prices, the upcoming launch of several liquefied natural gas (LNG) export projects should open access to higher-priced global markets.
Natural gas demand is also expected to climb as more gas-fired power plants are built to supply electricity for AI-driven data centres—an emerging source of long-term demand.
Risks to Consider
Investors should brace for near-term volatility. Analysts expect an oil supply surplus through next year, driven by rising production in non-OPEC nations like Canada and the U.S., coupled with weaker demand from China and potentially slower U.S. growth.
Regulatory challenges also loom over new pipeline projects. Even with government support to reduce dependence on the U.S. energy market, obtaining full stakeholder approval will be difficult.
Also Read: Best Growth Stocks to Buy Now
Dividend Strength
Despite these challenges, CNQ has increased its dividend for 25 consecutive years. At current levels, the stock offers an attractive yield of about 5.2%. The company’s disciplined capital allocation, operational efficiency, and robust financials have supported this consistent dividend growth.
The Bottom Line
The energy sector may remain choppy in the short term, but Canadian Natural Resources stands out as a strong long-term bet. Its solid fundamentals, attractive yield, and potential upside from energy price recovery make it a compelling pick for TFSA investors seeking both income and total return potential.
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