Valued at a market cap of over $90 billion, Canadian Pure Sources (TSX:CNQ) is among the many largest oil and fuel firms on this planet. Whereas CNQ is a part of a cyclical sector, it has delivered market-beating returns to long-term shareholders.

The Canadian power big has returned 180% to shareholders within the final 10 years. If we regulate for dividend reinvestments, the cumulative acquire is nearer to 340%.

In November 2025, the TSX power inventory is down 22% from all-time highs, permitting you to purchase the dip and profit from a ahead yield of 5.5%. Let’s see why Canadian Pure Sources inventory is an effective purchase proper now.

Is CNQ inventory a very good purchase proper now?

Canadian Pure Sources posted spectacular second-quarter outcomes, pushed by stellar operational efficiency amid a difficult macroeconomic surroundings.

Within the June quarter, CNQ produced 1.42 million barrels of oil equal (BoE) per day, regardless of deliberate upkeep that briefly lowered output by 120,000 BoE per day. Manufacturing in July rebounded sharply with oil sands mining and upgrading operations averaging 602,000 barrels per day at a formidable 106% upgrader utilization price.

The corporate accomplished two vital acquisitions that instantly enhance money move and add substantial drilling stock. The Palliser Block acquisition, which closed in late June after regulatory delays, introduced 50,000 barrels per day of manufacturing and 850 high-quality gentle oil drilling areas.

In early July, Canadian Pure acquired liquids-rich Montney belongings close to Grand Prairie for $750 million, which is predicted to contribute 32,000 barrels of oil equal day by day and add 150 further drilling areas. Mixed, these offers add roughly 1,000 areas to the event pipeline whereas sustaining unchanged capital steerage for the 12 months.

Administration demonstrated spectacular price self-discipline throughout operations. The just lately acquired Duvernay belongings are performing higher than anticipated, with working prices dropping to $8.43 per barrel within the second quarter, a 11% lower from the primary quarter. This interprets to $60 million in annual financial savings in comparison with preliminary targets.

Drilling and completion prices per effectively have improved 16% on a length-normalized foundation, with additional beneficial properties of $200,000 per effectively versus first-quarter ranges.

The corporate generated $3.3 billion in adjusted funds move and returned $1.6 billion to shareholders by $1.2 billion in dividends and $400 million in buybacks through the quarter. 12 months-to-date shareholder returns reached $4.6 billion by early August, and web debt remained manageable at just below $17 billion, with a robust steadiness sheet exhibiting 0.9 instances debt-to-earnings earlier than curiosity, taxes, depreciation, and amortization and over $4.8 billion in liquidity.

Canadian Pure maintains its industry-leading breakeven within the low to mid-$40 per barrel WTI vary. Administration expects comparable whole shareholder returns in 2025 in comparison with 2024 regardless of allocating solely 60% of free money move to distributions versus 100% final 12 months, which displays confidence within the accretive nature of current acquisitions and natural progress alternatives throughout the diversified asset base.

Is the TSX dividend inventory undervalued?

Canadian Pure Sources has elevated its annual dividend from $0.48 per share in 2016 to $2.13 per share in 2024. On this interval, its efficient yield has risen from 3% to virtually 7%.

Analysts monitoring CNQ inventory forecast adjusted earnings to develop from $2.85 per share in 2024 to $7.71 per share in 2029. On this interval, its annual dividend is forecast to develop from $2.13 per share to $2.60 per share.

If the TSX dividend inventory is priced at 10 instances ahead earnings, it might return 75% to shareholders inside the subsequent 4 years. After adjusting for dividends, cumulative returns could possibly be nearer to 100%.