A Canadian Dividend Stock Down 6% to Buy & Hold for Retirement

This Canadian energy company has increased its dividend annually for the past 26 years.

Finding deals is difficult in the current market conditions. Stock indexes are near record highs and valuations in some segments are lofty.

Investors with some cash to put to work, however, are still looking for good TSX dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) focused on income and long-term total returns.

trading chart of brent crude oil prices

Source: Getty Images

Canadian Natural Resources

Canadian Natural Resources (TSX: CNQ) trades near $66.50 at the time of writing compared to the 12-month high around $71.

The stock is up 44% in 2026, so the easy money has arguably been made, but more upside should be on the way for patient investors.

CNRL is a giant in the Canadian energy sector. The company owns vast reserves and operates oil sands, conventional heavy and light oil, offshore oil, natural gas liquids, and natural gas production. CNRL is the sole, or majority, owner on most of its assets. This gives management the flexibility to quickly shift capital around the portfolio to take advantage of positive moves in energy prices.

A diversified product mix is a big reason the company has been able to deliver annual dividend growth for investors in each of the past 26 years.

CNRL’s size and strong balance sheet give it the financial firepower to make large strategic acquisitions when energy prices are weak. Only a few companies have the capacity to do these types of deals, especially in the Canadian energy patch, so CNRL has a competitive advantage. When prices rebound, CNRL benefits from the jump in revenue and can invest capital to tap the new reserves.

Opportunity

The surge in the share price this year is due to the jump in oil prices caused by the closure of the Strait of Hormuz. At some point, the U.S. and Iran will iron out a deal and shipments will move again, but it will take time for producers to ramp up supply again, as damaged facilities need to be repaired and restarting idled sites can be a lengthy process.

As such, oil prices are expected to remain elevated, even if they decline from current levels.

Longer term, the demand for Canadian oil and natural gas is expected to rise considerably as global buyers search for safe supplies. Canada plans to boost export capacity in the next few years to meet this rising demand. CNRL has extensive reserves, so it can ramp up production if the new pipeline capacity materializes.

Risks

The U.S. government wants to drive down oil prices. Each time there is an announcement that a deal with Iran is getting close, the oil market sells off. When a deal actually happens, investors should prepare for a significant drop in oil prices. Energy stocks will likely pull back, as a result. The dip, however, might not last long.

The bottom line

Near-term volatility is expected, but CNRL deserves to be on your radar for a buy-and-hold dividend portfolio. Investors currently get a decent 3.7% yield on the stock. Any additional weakness in the share price would be an opportunity to add to the position.

The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.

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