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Here's Why Canadian Natural Resources (CNQ) is a Strong Value Stock

Zacks Equity Research
·2 min read

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.

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Canadian Natural Resources (CNQ)

Established in 1973, Calgary-based Canadian Natural Resources Limited is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The company boasts of a diversified portfolio of crude oil (heavy as well as light), natural gas, bitumen and synthetic crude oil (SCO). Canadian Natural Resources’ core operations are focused in Western Canada, the United Kingdom sector of the North Sea and offshore Africa, which includes Côte d’Ivoire, Gabon, and South Africa. The company reports its activities into two segments: Exploration & Production, and Oil Sands Mining and Upgrading.

CNQ sits at a Zacks Rank #3 (Hold), holds a Value Style Score of A, and has a VGM Score of A. Compared to the Oil and Gas - Exploration and Production - Canadian industry's P/E of 5.1X, shares of Canadian Natural Resources are trading at a forward P/E of 6.4X. CNQ also has a PEG Ratio of 0.5, a Price/Cash Flow ratio of 6.1X, and a Price/Sales ratio of 1.7X.

Many value investors pay close attention to a company's earnings as well. For CNQ, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.18 to $8.58 per share for 2022. Per share CNQ boasts an average earnings surprise of 15.5%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding CNQ to their portfolios.


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Zacks Investment Research