Canadian Natural Resources (TSX:CNQ) is among the largest companies in Canada. Valued at a market cap of almost $100 billion, CNQ stock has returned over 6,000% to shareholders in the last 30 years. However, after adjusting for dividend reinvestments, cumulative returns are much higher at 10,900%. So, an investment of $1,000 in CNQ stock would have returned close to $110,000 over a three-decade period, easily outpacing the broader markets.

Despite these outsized gains, CNQ stock trades almost 20% below all-time highs due to a volatile macro environment and lower commodity prices. The ongoing pullback has increased the TSX stock's dividend yield to 4.5%.

So, let's see if you should own this magnificent dividend stock at its current valuation.

Is CNQ stock a good investment right now?

Canadian Natural Resources develops, produces, markets, and sells crude oil, natural gas, and natural gas liquids. It offers synthetic crude oil, light and medium crude oil, and bitumen. Its midstream and refining assets include two crude oil pipeline systems and a working interest in an 84-megawatt cogeneration plant at Primrose.

Canadian Natural Resources' diversified business has allowed it to generate cash flows across market cycles while providing it with a competitive advantage.

In Q3 2024, Canadian Natural Resources delivered another knockout quarter, making it increasingly difficult for investors to ignore the Canadian energy giant.

In the September quarter, it delivered record production of 1.4 million barrels of oil equivalent per day. Moreover, the company maintained industry-leading operating costs of $20.67 per barrel.

Canadian Natural Resources generated an adjusted funds flow of $3.9 billion and adjusted earnings of $2.1 billion. Its steady cash flows allow the company to maintain a pristine balance sheet with a debt-to-EBTDA ratio of just 0.6 times.

Moreover, the energy heavyweight announced its 25th consecutive annual dividend increase and raised the quarterly payout by 7% year over year to $0.525 per share. In the first 10 months of the year, Canadian Natural Resources returned $6.7 billion to shareholders via dividends and buybacks. Additionally, it has raised dividends by more than 20% annually over the past 20 years, enhancing the yield-at-cost significantly.

CNQ recently announced plans to acquire Chevron's 20% interest in the Athabasca Oil Sands project, boosting its ownership to 90%. In addition to increasing production, the deal will help Canadian Natural Resources control one of North America's premier oil assets.

Is the TSX dividend stock still undervalued?

Analysts tracking CNQ stock expect adjusted earnings to expand from $3.46 per share in 2024 to $3.82 per share in 2025 and $4.20 per share in 2026. So, priced at 11 times forward earnings, CNQ stock is cheap, given its growth estimates and rising dividend payout.

Analysts remain bullish on CNQ stock and expect it to gain 22%, given consensus price target estimates. If we account for its dividend payout, total returns for the TSX dividend stock will be closer to 27% over the next 12 months.

Certain risks associated with investing in Canadian Natural Resources include fluctuating oil prices, regulatory changes, integration risks tied to acquisitions, and pipeline capacity constraints. However, the company offers a rare combination of growth, value, and income, making it a top investment choice in December 2024.

Its diversified asset base, operational excellence, commitment to shareholder returns, and cheap multiples make CNQ a valuable stock income investors would like to own.