Oil & Gas Dividends in the Storm: Why CNQ and ENB Are the Steadiest Plays

The global energy sector is navigating a tempest of uncertainty. China's sputtering demand, U.S. shale's relentless output, and the specter of a slowing economy have left oil prices languishing near $60 per barrel—a far cry from the $80+ highs of late 2024. Yet in this turbulence, two Canadian energy giants—Canadian Natural Resources (CNQ) and Enbridge (ENB)—stand out as pillars of resilience. Both offer dividend yields above 5%, track records of growth through cycles, and strategic plays to capitalize on the next upswing. For income-focused investors, they're not just safe havens—they're engines of compounding returns.

Canadian Natural Resources (CNQ): The Oil & Gas Diversifier

CNQ's stock has been battered by the oil slump, down 18% over the past year to $43 per share. But this is precisely where opportunity lies. While crude prices have cratered, natural gas is roaring back—a critical hedge for CNQ, which derives nearly 40% of its production from this commodity. With U.S. liquefied natural gas (LNG) exports hitting record highs and Asian demand rebounding, gas prices are poised to stabilize or rise, buoying CNQ's cash flows.

CNQ's dividend, currently yielding 5.5%, has been a rock of consistency. The company has increased payouts annually for 25 years, and even through the oil price collapse of 2020, it maintained distributions. Its latest hike to $0.5875 per share in April 2025 underscores management's confidence. Crucially, CNQ's payout ratio remains sustainable: at 45%, well below the 60% threshold that could signal overextension.

Enbridge (ENB): The Infrastructure Giant with a Growth Pipeline

While CNQ battles the oil markets, Enbridge is building an empire. The $28 billion capital program through 2026—funded by a fortress balance sheet with $30 billion in liquidity—positions ENB to dominate North American energy infrastructure. Its 2024 acquisition of three U.S. natural gas utilities for $14 billion isn't just diversification; it's a bet on the decarbonization boom, where gas will remain a bridge fuel for decades.

ENB's 5.9% yield isn't just about income—it's about growth. The company has hiked dividends for 30 consecutive years, with a 9% CAGR, and plans to raise payouts by 3% annually through 2026. Its disciplined payout ratio (60–70% of distributable cash flow) leaves room to reinvest in projects like the Line 3 oil pipeline expansion and offshore wind partnerships.

Why Both Are Winning Plays in 2025—and Beyond

The case for CNQ and ENB isn't just about dividends. It's about valuation and catalysts:
- CNQ's Discounted Valuation: At a price-to-cash-flow multiple of 4.5x, CNQ trades at a 30% discount to its five-year average. A rebound in oil prices to $70–75 per barrel—a realistic target if OPEC+ cuts output—could unlock 20%+ upside.
- ENB's Rate Sensitivity: Falling interest rates (the 10-year Treasury yield is down to 3.2%) are a gift to utilities and infrastructure firms. ENB's $50 billion in long-term debt carries an average interest rate of 4.5%, meaning every 25-basis-point decline saves $62.5 million annually—a direct boost to dividends.

The Call to Action: Build Income, Hedge Volatility

In a TFSA or retirement account, these stocks are dual-purpose weapons. They provide income stability (CNQ's 5.5% and ENB's 5.9% yields) while offering capital appreciation as energy markets stabilize.

• For CNQ: Buy now to lock in the dividend while the stock is undervalued. Hold for the gas rebound and oil's eventual recovery.
• For ENB: Add to a core portfolio position—its infrastructure bets and dividend growth are recession-resistant.

The energy sector isn't dead—it's evolving. CNQ and ENB are the survivors, the innovators, and the income engines. In a market where fear is contagious, these two stocks are the antidote.

Investors: Act now before the next upswing leaves you behind.