Earn $100 Monthly With a Simple $17,025.75 Investment

A less than $20,000 investment in a high-yield energy stock can produce $100 every month.

| More on:
Canadian Dollars

Image source: Getty Images

The Canadian stock market has gained 11.03% since November 2023 due to mild bull rallies and moderating inflation. Going into the last week of May 2024, the TSX is up 6.5% year to date, led by the energy sector’s +22.11%. Market analysts believe rate cuts will drive dividend expansion.

A report by S&P Global Market Intelligence Dividend Forecasting (S&P Global MI DF) in January said that regular base dividend payouts would grow by an average of 6% year over year, with more than 50% coming from heavyweight sectors such as banking and energy. 

Bank of Nova Scotia and Whitecap Resources (TSX:WCP) are among the top picks for their generous dividend yields. However, most income-focused investors would find the energy stock more appealing for three reasons: lower share price ($10.35 vs. $65.27), higher yield (7.05% vs. 6.5%), and payout frequency (monthly vs. quarterly).

Furthermore, Whitecap is up 19.64% year to date compared to +4.46% for BNS. Whitecap’s current dividend yield is exceedingly higher than the 4.7% industry average. But is the generous payout sustainable? Given the 57.9% payout ratio (BNS is 68.9%), it should be.

Potential earnings on a simple investment

Frequent dividend payments attract more income investors. Besides the steady income streams you can incorporate into your monthly budget, you can reinvest the dividends 12 times a year instead of four for faster principal compounding.

With Whitecap Resources, a $17,025.75 investment (1,645 shares) transforms into a $100.03 monthly passive income. Assuming you don’t collect the dividends but reinvest them, your money will more than double to $34,386.50 in 10 years. The total dividend earnings of $17,360.75 represents a 101.97% money growth through the power of compounding.     


The $6.2 billion oil-weighted growth company operates in northwest Alberta (West division) and central Alberta (East division). Whitecap’s light oil resource base is the foundation for growth, while the portfolio of assets (petroleum and natural gas) delivers predictable cash flows. The low-decline light oil asset base also supports an internally funded business model.

Whitecap’s exploration and production activities focus on the Western Canadian Sedimentary Basin, competing with several companies of various sizes. Identifying, finding, and developing oil and gas reserves at economical costs and marketability of the oil and gas produced are perennial risks.

Other business risks are the demand for oil and gas in North America, commodity prices, and currency exchange rates. 

Production and financial highlights

Whitecap had an exceptional first quarter (Q1) of 2024, production-wise, owing to the record average production of 108,210 barrels per day (bbls/d) of light oil and liquids and 368,701 thousand cubic feet per day (mcf/d) of natural gas. Management said it was the most active quarter in the company’s history and expects the divisions to outperform in Q2.

In the three months ended March 31, 2024, total revenues and net income declined 1.7% and 77.2% year over year to $868.3 million and $59.8 million. Nevertheless, the balance sheet remains strong due to the downside price protection. The total dividend payments of $109 million were 24% higher than in Q1 2023.

Buy rating

Management is confident and comfortable about the sustainability of the current monthly dividend despite the constant stress on commodity prices. The commercial operation of the expanded TMX pipeline beginning in May 2024 is a tailwind. Market analysts recommend a buy rating for Whitecap Resources.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Bank Of Nova Scotia and Whitecap Resources. The Motley Fool has a disclosure policy.

More on Dividend Stocks

calculate and analyze stock
Dividend Stocks

4 Fabulous Dividend Stocks to Buy in July

Are you looking for long-term income? These four dividend stocks should not only provide you with value in July but…

Read more »

financial freedom sign
Dividend Stocks

5 Steps to Financial Freedom for Canadian Millennials

Follow these steps and nothing can stop Canadian millennials from achieving their early retirement dreams.

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

We’re Only Getting Older: A Top TSX Stock That Benefits From an Aging Population

For a bet on the aging population, consider this small-cap stock with growth potential.

Read more »

Growing plant shoots on coins
Dividend Stocks

Yield Today, Growth Tomorrow: 3 Stocks to Keep Building Your Wealth

For investors seeking yield today and growth tomorrow, these top Canadian dividend stocks are certainly worth considering right now.

Read more »

Payday ringed on a calendar
Dividend Stocks

This 10.72% Dividend Stock Pays Cash Every Month

This dividend stock remains a consistent, defensive dividend producer that will give up over 10% in income each and every…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

TFSA Investors: 2 Standout Domestic Stocks With 7% Yields

These top dividend-growth stocks look oversold.

Read more »

Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Despite their recent declines, the long-term growth outlook of these two top dividend stocks remains strong, which could help their…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Growth Stocks vs. Value Stocks: Which Should You Choose?

There are growth stocks and value stocks, but there are also growing value stocks that fit into both sides of…

Read more »