Over the past several years, many Canadian energy stocks have become dividend juggernauts. Canadian energy companies have been working hard to use excess cash to pay down debt, lower operating costs, and consolidate the sector.
Despite the price of oil and gas drastically declining from levels in 2022, many of these companies are still generating strong cash flows. This means there is still opportunity for more dividends over time.
If you are willing to be patient through the current energy price stalemate, there are likely to be more dividends ahead. Here are three top Canadian energy stocks that have grown their dividends insanely fast.
A Canadian energy stock that is the king of special dividends
Tourmaline Oil (TSX:TOU) pays a small base dividend of only 1.7%. However, since 2018, it has increased that base dividend by 170%. Likewise, Tourmaline has been spewing special dividends.
This year, it has already paid $3.50 per share in special dividends. That is equal to a 6% dividend yield for only the first half of the year. Given the strong price of natural gas last year, it paid $7 per share in special dividends (equal to a 10% yield).
Tourmaline has no net debt. Likewise, it owns most of its infrastructure so that ensures a very low cost, efficient operating structure. Most important, it can sell natural gas to some of the highest-pricing regions in the world.
As a result, the company can generate a lot of spare cash. It is paying most of that entirely back to shareholders. This is one of the best energy companies in Canada and a good stock to own for big dividends.
A mid-cap with an elevated yield
Whitecap Resources (TSX:WCP) is an attractive stock if you are looking for an elevated base dividend. After a tough decline in 2023, this Canadian energy stock yields 6%. Today, investors can earn a $0.04833-per-share dividend every single month! That makes this a great stock if you want that consistent month-to-month income.
Last year, Whitecap increased its monthly dividend twice for a total increase of 63%. In 2023, it increased its monthly dividend by 31.6%. Whitecap has 20 years of oil and gas inventory to draw from.
The company hopes to hit debt targets by the end of 2023. After which management has noted that it will raise its dividend again by over 25%. It could be even better if energy prices recover to over US$90 per barrel.
A mega-cap energy stock gushing dividends
With a market cap of $81 billion, Canadian Natural Resources (TSX:CNQ) is Canada’s largest energy company and one of its largest stocks. Canadian Natural has a tremendous history of consistently growing its dividend. It has grown its dividend by a compound annual growth rate of over 20% for over 23 years.
The company is a behemoth. Yet its operations are incredibly consistent and efficient. As a result, it can generate free cash flow at a very low cost. This has enabled it to generously reward shareholders over the past few years.
Investors earn a 4.88% dividend yield at the price as of writing. Last year, it increased its dividend twice for a combined quarterly dividend increase of 45%. Not to forget, it also paid a special $1.50 per share dividend.
This year it only increased its quarterly dividend by 6%. However, once it hits targets for less than $10 billion of net debt, shareholders will start collecting 100% of its free cash flow. Certainly, bigger dividends are on the way.
