Canadian traders centered on passive earnings and complete returns are questioning which TSX dividend shares may be undervalued and are good to purchase proper now for a self-directed Tax-Free Financial savings Account (TFSA) or Registered Retirement Financial savings Plan (RRSP) portfolio.

Within the present market atmosphere, it is smart to search for sector leaders with lengthy observe information of delivering dividend development all through the financial cycle.

Canadian Pure Assets

Canadian Pure Assets (TSX:CNQ) is a huge within the Canadian power sector with a present market capitalization of practically $95 billion. The inventory trades near $45 on the time of writing, in comparison with a excessive of round $55 final 12 months.

CNRL is greatest recognized for its in depth oil manufacturing operations. The corporate owns oil sands, typical gentle and heavy oil, and offshore oil belongings. As well as, CNRL is a serious participant within the Canadian pure fuel sector with manufacturing, infrastructure, and huge reserves in Western Canada.

The diversified product portfolio and CNRL’s place as the only or majority proprietor of most of its belongings are key to the corporate’s success. Administration has the pliability to shortly shift capital to benefit from helpful strikes in commodity costs. On the identical time, CNRL’s measurement and stability sheet energy allow it to make strategic acquisitions to drive income development and broaden the reserve base when power costs are underneath strain. For instance, CNRL spent US$6.5 billion final 12 months to purchase Chevron’s Canadian belongings.

Administration has performed a great job of boosting output in 2025 by a mixture of offers for belongings and profitable drilling applications. Oil and pure fuel manufacturing within the third quarter (Q3) of 2025 got here in at file ranges. The rise in manufacturing has helped offset the influence of decrease power costs. For the primary 9 months of 2025, CNRL generated adjusted internet earnings from operations of $5.733 billion in comparison with $5.437 billion in the identical interval final 12 months.

Dividends and share buybacks

After the closing of the Chevron Canada deal, CNRL adjusted its coverage for distributing free money move. Below the present steering, the corporate plans to allocate 60% of free money move to shareholders and 40% to the stability sheet till internet debt falls to $15 billion. This switches to 75% and 25% respectively, when internet debt is between $12 billion and $15 billion. When internet debt reaches $12 billion, the corporate will allocate 100% of free money move to shareholders. CNRL reported internet debt of about $17 billion on the finish of Q3 2025.

CNRL raised the dividend in every of the previous 25 years. On the present share value, traders can get a dividend yield of 5.2%.

Outlook

Analysts broadly count on oil costs to stay underneath strain into 2026. File manufacturing in Canada and america, together with a provide improve from OPEC members, will doubtless end in surplus situations as demand from China stays weak and financial dangers put strain on world oil consumption.

That being mentioned, Canadian oil and pure fuel producers are getting extra pipeline capability to succeed in consumers. Brownfield growth initiatives on current oil transmission infrastructure and the development of latest liquified pure fuel (LNG) export amenities will allow CNRL and its friends to spice up output within the coming years.

CNRL stays very worthwhile at present oil costs, and there may be massive upside potential when the market rebounds.

The underside line

Close to-term headwinds are anticipated for power costs, however CNRL ought to be a stable choose proper now for contrarian traders centered on dividends and long-term complete returns. You probably have some money to place to work, this inventory deserves to be in your radar.