Gas and oil companies have been some of the best investments in recent years as the world has increasingly relied on these resources.
Maybe they are not sustainable but they are still in high demand and will be for the foreseeable future.
As we all know, the energy sector has been under pressure in recent years due to a variety of factors, including increasing oil prices, the rise of renewable energy, and concerns about climate change.
Despite these challenges, there are still some gas and oil companies that have strong financials and offer good dividend yields.
In this article, we will discuss two companies with great financials and dividends: Canadian Natural Resources (CNQ) and Enbridge, Inc. (ENB).
Overview
Let’s take a look at the two companies in more detail:
Canadian Natural Resources (CNQ)
Canadian Natural Resources Limited is a Canadian oil and natural gas company operating in the Western Canada provinces of British Columbia, Alberta, Saskatchewan, and Manitoba.
The company also has offshore operations in the United Kingdom sector of the North Sea and offshore Côte d’Ivoire and Gabon.
The company, with its headquarters in Calgary, Alberta, has the largest undeveloped base of any company in the Western Canadian Sedimentary Basin.
It is not only the largest independent producer of natural gas in Western Canada but also the biggest producer of heavy crude oil that can be found across all of Canada.
Founded back in 1973, the company produces Petroleum, Natural gas, and Natural gas liquids.
With a market cap of 68.547B, the company is also known for giving a generous amount of dividends to its shareholders.
Enbridge Inc (ENB)
Enbridge Inc is a Canadian multinational energy transportation company based in Calgary, Alberta and it focuses on the transportation, distribution, and generation of energy in North America.
The company was founded in 1949 as Interprovincial Pipe Line System.
The company owns and operates the world’s longest crude oil and liquids transportation system.
This system consists of around 32,000 miles (51,000 km) of the active pipeline, as well as 230 terminals. These pipelines transport crude oil from the Alberta oil sands to the refineries on the U.S. Gulf Coast.
In addition to its pipeline network, the company also owns and operates one of the largest natural gas transmission systems in North America. This system consists of around 15,000 miles (24,000 km) of active pipelines.
The company’s operations are organized into five business segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution, Renewable Power Generation, and Energy Services.
Founded in 1949, the company has a market cap of 84.67B and is also known for giving a generous amount of dividends to its shareholders.
Financials
Now let’s take a look at the financials of these two companies.
Canadian Natural Resources (CNQ)
Canadian Natural Resources is one of the largest oil and natural gas producers in western Canada with subsidiary operations in the North Sea and Offshore Africa.
The company invests in a variety of resources, including light and medium oil, heavy oil, bitumen, synthetic oil, natural gas liquids, and natural gas.
2020’s production averaged 1.16 million barrels of oil equivalent per day, and the company has an estimated 11.5 billion of proven and probable crude oil and natural gas reserves.
Even though the company has been affected by the increase in oil prices, it has still managed to generate strong profits.
The company’s strong financials have allowed it to maintain its dividend payout even during these tough times. Currently, the company has a dividend yield of 4.10%.
Enbridge Inc (ENB)
Enbridge is one of North America’s largest energy infrastructure companies with operations in liquids pipelines, gas transmission, midstream, gas distribution, renewable power generation, and energy services.
The company’s liquids pipelines segment includes its flagship product, the Line 3 Replacement Program.
This program is one of the largest capital projects in North America and is currently being constructed to transport crude oil from Alberta to refineries in Wisconsin.
Enbridge also has a large gas transmission and midstream business that owns and operates the largest natural gas pipeline system in North America. This system consists of around 15,000 miles (24,000 km) of active pipelines.
The company’s renewable power generation business owns and operates around 3,700 MW of capacity, making it one of the largest renewable power generators in North America.
Enbridge also has a large gas distribution business that serves around 3.7 million customers in Ontario, Quebec, and New Brunswick.
Enbridge’s strong financials have allowed it to maintain its dividend payout even during these tough times. Currently, the company has a dividend yield of 6.04%.
Dividends & Growth and other factors
Now let’s take a look at the dividends and growth prospects of these two companies.
Canadian Natural Resources (CNQ)
Friday, November 11th 2022 was a good day for Canadian Natural Resources Ltd., with the company’s stock rising 1.15% to C$82.14. The overall Canadian market did well too, with the S&P/TSX Composite Index increasing 0.61% to 20,111.51.
For the second day in a row, Canadian Natural Resources Ltd. saw its stock prices rise. On April 21st, 2022, the company achieved its 52-week high of C$88.18, and today it closed close to that same price point.
Shares traded at 2.5 million, remaining below the 50-day average volume of 5.9 million shares.
CNQ is currently trading at $61.92(USD) and offering a dividend yield of 4.10%. CNQ has a dividend 10 year growth rate of 18.7%. Below is a graph of the growth of the dividends.
Enbridge Inc (ENB)
Friday November 11th, 2022 was also good for Enbridge Inc, with the company’s stock rising 0.77% to $41.82. Since the overall Canadian market was up on the day, this was enough to give Enbridge a positive contribution to its market value.
The company’s stock has been on a bit of a roller coaster over the past month. The 52-week high is $47.67 and the 52-week low is $35.02.
The stock is currently trading at $41.82(USD) with today’s rise of 2.22%. And it’s currently offering a 6.04% dividend yield. I ENB has a dividend 10 year growth rate of 13%. Below is a graph of the growth of the dividends.
Long Term Prospects
Now, let’s take a look at the long-term prospects of these two companies.
Canadian Natural Resources (CNQ)
Canadian Natural Resources is a well-run company with a strong balance sheet, good governance, and a long track record of operational excellence.
The company has a large portfolio of high-quality assets, including a significant position in the Alberta oil sands.
It also has several other key assets, including natural gas operations in British Columbia and offshore oil fields in the Atlantic Ocean.
Canadian Natural Resources is well-positioned to benefit from the eventual recovery in oil prices.
And, even if oil prices remain high in the near term, the company’s strong financial position will allow it to weather the storm and continue paying its dividend.
The company’s current dividend yield of 4.10% is very attractive, and its dividend is well-covered by earnings and cash flow.
Canadian Natural Resources can be a great long-term investment for income and capital growth.
Enbridge Inc (ENB)
Enbridge is another high-quality company with a strong financial position and an attractive yield.
Since it mainly deals with transportation and storage of energy, Enbridge is less affected by the fluctuations in commodity prices.
The company has a diversified business model with operations in both Canada and the United States.
It also has a strong track record of dividend growth, having increased its dividends for 23 consecutive years.
It’s also offering a 6.04% yield, which is quite high for a company with such a strong financial position.
Enbridge is a great option for income-seeking investors looking for stability and dividend growth.
Enbridge does have a lot of debt but is currently trying to reduce it with selling some assets and actively trying to lower it. They have plenty of cash to cover the debt and dividends.
Should You Invest
Just like any other investment, there are risks and rewards to consider with both of these companies. But overall, they are both high-quality companies with great financials and dividends.
If you are looking for a value company with steady dividends, then either of these companies could be a good choice. Both companies are very optionable with plenty of expirations and contracts. Both of these stocks have traded in a small range and would be great securities for the Options Wheel Strategy. If you want to learn more about the Options Wheel here is a great link. Options Wheel Strategy to Double Returns
If you are looking for a higher-yielding investment, then Enbridge is the better option. However, if you are looking for more capital growth potential, then Canadian Natural Resources is the better choice.
Of course, you should always do your research before making any investment decisions. But if you are looking for a good income-producing investment, then these two companies are worth considering.
If you want to learn more about these companies below are direct links.
Thanks for taking the time to read my post.
Uncle Jim
