Canadian Natural Resources Ltd. (TSX—CNQ; NYSE—CNQ) serves up a special dividend of $1.50 a share following another appetizing quarter, Desjardins Capital Markets analyst Chris MacCulloch states on Aug. 4. That’s on top of its regular quarterly dividend of $0.75 a share ($3 annually).
The special dividend will expand total capital returned to shareholders by about $1.75 billion, on top of the approximate $4.65 billion already distributed in first-half 2022. Meanwhile, Canadian Natural continues to demonstrate considerable progress toward achieving its $8-billion corporate net debt target, with another $1.4 billion paid down during the quarter, trimming the balance to $12.4 billion.
Going forward, the company reiterated its capital allocation framework, earmarking 50 per cent of FCF (free cash flow) toward shareholder returns, with the remainder applied to the balance sheet.
Record natural gas production contributes to its second-quarter 2022 cash flow beat. With that money, CNQ is doing it all – special dividends, share buybacks and continued debt reduction. Furthermore, the company beefed up its capital spending amid a rising production forecast.
CFPS (cash flow per share) was $4.66, well above consensus of $4.42 and Mr. MacCulloch’s estimate of $4.31. The cash flow beat was primarily driven by stronger price realizations, as well as higher-than-expected production of 1.211 million barrels of oil equivalent (BOE) per day, which outpaced the Street consensus at 1.199 million BOE daily.
Production was led by the conventional explorer-and-production business, which included record corporate natural gas output of about 2.105 billion cubic feet per day. Given the robust commodity price outlook, CNQ expanded its 2022 capital budget by about 13 per cent to $4.920 billion (from $4.345 billion).
This is an edited version of an article that was originally published for subscribers in the August 19, 2022, issue of Investor’s Digest of Canada. You can profit from the award-winning advice subscribers receive regularly in Investor’s Digest of Canada.
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Investor's Digest of Canada •10/20/22 •