Investor's Digest of Canada, MPL Communications Inc.133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846

Tyler Reardon and Jeff Martin think the world of Canadian Natural Resources Inc. (CNQ-TSX, $34.58). Both gents are analysts with Peters & Co. in Calgary. And they view Canadian Natural's cash flow as one of the best among the big oil and gas plays.

They also cite the company's strong overall growth profile, as well as its good valuation relative to its peers.

So enamored of Canadian Natural are Messrs. Martin and Reardon that they're continuing to peg it at "sector outperform, with a 12-month price target of $40 a share.

But they're worried, they write, about the company's ability to control the costs of large-scale projects in Western Canada.

Their concern follows the recent announcement of a hike in construction costs for a bitumen refinery 45 kilometres northeast of Edmonton for which Canadian Natural will supply feedstock.

Because of additional engineering work, the 50,000-barrel-a-day refinery, originally priced at $5.7 billion, will now cost 49.1 per cent, or $2.8 billion more.

In addition, the completion date, originally set for mid-2016, has now been pushed back to September 2017.

As a result of the cost increase, Canadian Natural's share of the project will rise by $600 million.

Messrs. Martin and Reardon admit the increase will result in only a minimal change in their valuation for the company. But it will do nothing, they suggest, to mollify investors. They also say the overrun shows why they still use more conservative cost assumptions when making long-term forecasts for mega projects in the oilpatch.

The refinery itself is billed as the world's first such facility that combines gasification technology, storage and integrated carbon capture. The refinery will also be the first to sell its carbon dioxide for the purposes of enhanced oil recovery.

In the meantime, Canadian Natural says the expansion to its Horizons tar sands project remains on budget.

Our analysts were largely on-side with Messrs. Martin and Reardon in their take on Canadian Natural Resources. Of the 13 other folks we surveyed, two rated the company a "hold," but 11 rated it a "buy," lofting it into top spot this month in our list of must-have stocks.

And Canadian Natural, as Messrs. Martin and Reardon seem to say, makes investment sense. Although its yield, at 2.3 per cent, is small, the company continues to raise its dividend, having boosted it 60 per cent as recently as November. Such increases suggest Canadian Natural is confident in its cash flow.

Headquartered in Calgary, Canadian Natural Resources is one of the world's biggest independent producers of crude oil and natural gas.

Not only is it the second-biggest producer of gas in Canada, it's also the biggest producer of heavy oil. Indeed, its Horizons project boasts a reserve of six billion barrels.

In addition to North America, Canadian natural Resources boasts operations in the North Sea, as well as off the coast of Africa.

For the third quarter of 2013, the company's net income zoomed to $1.2 billion, or $1.07 a share, from $476 million, or $0.44 a share, for the similar period in 2012.

Revenue was also higher, rising 32.5 per cent to $5.3 billion, while net earnings from operations climbed 186 per cent to $1.1 billion, or $0.93 a share.Operating cash flow, not surprisingly, was strong as well, rising 78.6 per cent to $2.5 billion, or $2.26 a share.

For the nine months ended Sept. 30, Canadian Natural's net income rose to $1.9 billion, or $1.70 a share, from $1.5 billion, or $1.40 a share, for the similar period in 2012.

Revenue, too, came in strongly, growing 12.4 per cent to $13.6 billion, while net earnings from operations rose 26.7 per cent to $1.9 billion, or $1.72 a share.

Operating cash flow, meanwhile, increased to $5.7 billion, or $5.23 a share, from $4.5 billion, or $4.07 a share, for the similar period in 2012.