TSX:CNQ

Stock Analysis Report

Canadian Natural Resources

Executive Summary

Canadian Natural Resources Limited explores for, develops, produces, and markets crude oil, natural gas, and natural gas liquids (NGLs).

Rewards

Trading at 50.8% below its fair value

Earnings grew by 7.4% over the past year

Pays a high and reliable dividend of 3.86%

Risk Analysis

Earnings are forecast to decline by an average of -20.4% per year for the next 3 years

Has a high level of debt

Significant insider selling over the past 3 months



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Canadian Natural Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CNQ has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.6%

CNQ

0.6%

CA Oil and Gas

0.6%

CA Market


1 Year Return

5.3%

CNQ

0.2%

CA Oil and Gas

5.8%

CA Market

Return vs Industry: CNQ exceeded the Canadian Oil and Gas industry which returned 0.2% over the past year.

Return vs Market: CNQ matched the Canadian Market which returned 5.8% over the past year.


Shareholder returns

CNQIndustryMarket
7 Day0.6%0.6%0.6%
30 Day-6.3%-2.3%0.5%
90 Day4.2%3.8%3.6%
1 Year9.7%5.3%4.6%0.2%9.1%5.8%
3 Year9.2%-1.4%-7.0%-16.9%15.4%5.0%
5 Year22.5%3.5%-9.6%-24.0%33.6%14.0%

Price Volatility Vs. Market

How volatile is Canadian Natural Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Canadian Natural Resources undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CNQ (CA$38.81) is trading below our estimate of fair value (CA$78.94)

Significantly Below Fair Value: CNQ is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CNQ is poor value based on its PE Ratio (11.5x) compared to the Oil and Gas industry average (11x).

PE vs Market: CNQ is good value based on its PE Ratio (11.5x) compared to the Canadian market (15.9x).


Price to Earnings Growth Ratio

PEG Ratio: CNQ's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CNQ is overvalued based on its PB Ratio (1.3x) compared to the CA Oil and Gas industry average (0.7x).


Next Steps

Future Growth

How is Canadian Natural Resources forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-20.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNQ's earnings are forecast to decline over the next 3 years (-20.4% per year).

Earnings vs Market: CNQ's earnings are forecast to decline over the next 3 years (-20.4% per year).

High Growth Earnings: CNQ's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CNQ's revenue (1.9% per year) is forecast to grow slower than the Canadian market (4.9% per year).

High Growth Revenue: CNQ's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CNQ's Return on Equity is forecast to be low in 3 years time (9.5%).


Next Steps

Past Performance

How has Canadian Natural Resources performed over the past 5 years?

21.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CNQ has high quality earnings.

Growing Profit Margin: CNQ's current net profit margins (19.6%) are higher than last year (16.7%).


Past Earnings Growth Analysis

Earnings Trend: CNQ's earnings have grown significantly by 21.8% per year over the past 5 years.

Accelerating Growth: CNQ's earnings growth over the past year (7.4%) is below its 5-year average (21.8% per year).

Earnings vs Industry: CNQ earnings growth over the past year (7.4%) exceeded the Oil and Gas industry 6%.


Return on Equity

High ROE: CNQ's Return on Equity (11.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Canadian Natural Resources's financial position?


Financial Position Analysis

Short Term Liabilities: CNQ's short term assets (CA$4.7B) do not cover its short term liabilities (CA$7.9B).

Long Term Liabilities: CNQ's short term assets (CA$4.7B) do not cover its long term liabilities (CA$35.9B).


Debt to Equity History and Analysis

Debt Level: CNQ's debt to equity ratio (64.6%) is considered high.

Reducing Debt: CNQ's debt to equity ratio has increased from 49% to 64.6% over the past 5 years.

Debt Coverage: CNQ's debt is well covered by operating cash flow (34.6%).

Interest Coverage: CNQ's interest payments on its debt are well covered by EBIT (5.6x coverage).


Balance Sheet

Inventory Level: CNQ has a high level of physical assets or inventory.

Debt Coverage by Assets: CNQ's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Canadian Natural Resources's current dividend yield, its reliability and sustainability?

3.86%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%1.9%markettop25%5.3%industryaverage4.8%forecastin3Years4.1%

Current dividend yield vs market & industry

Notable Dividend: CNQ's dividend (3.86%) is higher than the bottom 25% of dividend payers in the Canadian market (1.91%).

High Dividend: CNQ's dividend (3.86%) is low compared to the top 25% of dividend payers in the Canadian market (5.32%).


Stability and Growth of Payments

Stable Dividend: CNQ's dividends per share have been stable in the past 10 years.

Growing Dividend: CNQ's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (43.2%), CNQ's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CNQ's dividends in 3 years are forecast to be covered by earnings (53.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure


CEO

Tim McKay (57yo)

1.9yrs

Tenure

CA$7,218,208

Compensation

Mr. Timothy Shawn McKay, also known as Tim, is President and Director of Canadian Natural Resources Limited since March 01, 2018 and February 2018 respectively. Prior thereto, he joined the Corporation as  ...


CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD5.45M) is about average for companies of similar size in the Canadian market ($USD6.85M).

Compensation vs Earnings: Tim's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Norman Edwards
Executive Chairman7.8yrsCA$10.76m1.84% CA$849.7m
Timothy McKay
President & Director1.9yrsCA$7.22m0.099% CA$45.5m
Steve Laut
Executive Vice Chairman1.9yrsCA$5.63m0.20% CA$91.1m
Scott Stauth
Chief Operating Officer of Oil Sands2.8yrsCA$2.81m0.013% CA$6.1m
Corey Bieber
Executive Advisor0.9yrsCA$2.40m0.016% CA$7.4m
Mark Stainthorpe
CFO & Senior VP of Finance0.9yrsno data0.0023% CA$1.0m
Ronald Dae Jung Kim
Principal Accounting Officer & VP of Finance0.9yrsno data0.0014% CA$635.8k
Joy Romero
Vice-President of Technology & Innovation0yrsno datano data
Stephen Suche
Vice-President of Information & Corporate Services13.6yrsno datano data
Paul Mendes
VP of Legal10yrsno data0.0015% CA$704.9k

1.9yrs

Average Tenure

58yo

Average Age

Experienced Management: CNQ's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Norman Edwards
Executive Chairman7.8yrsCA$10.76m1.84% CA$849.7m
Timothy McKay
President & Director1.9yrsCA$7.22m0.099% CA$45.5m
Steve Laut
Executive Vice Chairman1.9yrsCA$5.63m0.20% CA$91.1m
Francis McKenna
Independent Director13.5yrsCA$280.38k0.0014% CA$663.4k
David Tuer
Independent Director17.8yrsCA$257.38k0.0074% CA$3.4m
Gordon Giffin
Independent Lead Director7.8yrsCA$300.38k0.0074% CA$3.4m
Wilfred Gobert
Independent Director9.3yrsCA$261.88k0.0052% CA$2.4m
Timothy Faithfull
Independent Director9.3yrsCA$271.88k0.00076% CA$350.1k
Catherine Best
Independent Director16.3yrsCA$276.38k0.0040% CA$1.8m
Christopher Fong
Independent Director9.3yrsCA$256.38k0.0027% CA$1.3m

9.3yrs

Average Tenure

69yo

Average Age

Experienced Board: CNQ's board of directors are considered experienced (9.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CNQ insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Canadian Natural Resources Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Canadian Natural Resources Limited
  • Ticker: CNQ
  • Exchange: TSX
  • Founded: 1973
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: CA$46.070b
  • Shares outstanding: 1.19b
  • Website: https://www.cnrl.com

Number of Employees


Location

  • Canadian Natural Resources Limited
  • 2100, 855-2nd Street S.W.
  • Calgary
  • Alberta
  • T2P 4J8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CNQTSX (The Toronto Stock Exchange)YesCommon SharesCACADMay 1976
CNQNYSE (New York Stock Exchange)YesCommon SharesUSUSDMay 1976
CRCDB (Deutsche Boerse AG)YesCommon SharesDEEURMay 1976

Biography

Canadian Natural Resources Limited explores for, develops, produces, and markets crude oil, natural gas, and natural gas liquids (NGLs). The company offers synthetic crude oil (SCO), light and medium crude oil, bitumen (thermal oil), primary heavy crude oil, and Pelican Lake heavy crude oil. Its midstream assets include two crude oil pipeline systems; and a 50% working interest in an 84-megawatt cogeneration plant at Primrose. As of December 31, 2017, the company’s gross proved crude oil, bitumen, SCO, and NGLs reserves totaled 8,784 million barrels; gross proved plus probable crude oil, bitumen, SCO, and NGLs reserves totaled 11,760 million barrels; proved natural gas reserves totaled 6,652 billion cubic feet; and gross proved plus probable natural gas reserves totaled 9,734 billion cubic feet. It operates primarily in Western Canada; the United Kingdom portion of the North Sea; and Offshore Africa. The company was formerly known as AEX Minerals Corporation and changed its name to Canadian Natural Resources Limited in December 1975. Canadian Natural Resources Limited was incorporated in 1973 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:34
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.