Dividend investing is the best option for people seeking extra income to supplement active or regular income. Regardless of the amount, the invested funds will provide a level of cash flow streams depending on the stock’s payout frequency. If the objective is capital growth, reinvesting dividends instead of collecting them will compound the money over time.
Today, monthly income-seekers can transform a $10,000 investment into $60.33 monthly (the principal is intact). Whitecap Resources (TSX:WCP) in the energy sector is among the few TSX stocks that pays monthly dividends. The table below shows the monthly payout (total annual payout of $723.96 divided by 12) from the 7.24% dividend yield.
| Company | Recent Price | No. of Shares | Dividend/Share | Total Payout | Frequency |
| Whitecap | $10.08 | 992 | $0.73 | $723.96 | Monthly |
Let’s assume you want to reinvest the dividend income, grow the capital, and start collecting after 10 years. If the yield remains constant, your money will more than double to $20,580.84 through the power of compounding. The monthly income stream after 2034 becomes $1,715.05 from $60.33 in 2025.
Financial performance
Whitecap Resources is an oil and liquids-weighted growth company with a market cap of $5.9 billion. The heavyweight sector it belongs to finished strong in 2024 (+10.1% in the last month) and is off to a good start in 2025 (+4.7% year-to-date). At $10.08 per share, WCP’s trailing one-year price return is 27.8%-plus versus the sector’s 18.9%-plus.
In Q3 2024, total revenues (petroleum and natural gas) declined 7.3% to $890.9 million compared to Q3 2023, while net income rose 44.3% year-over-year to $274.2 million. Notably, total dividend payments increased 18.6% to $107.9 million from a year ago. According to management, quarterly production exceeded expectations because of the continued strong operational momentum. For the nine months ending September 30, 2024, cash flow from operating activities climbed 10.4% year-over-year to $1.4 billion.
Management will release the Q4 and full-year 2024 results on February 19, 2025. However, initial data shows 174,000 barrels of oil equivalent per day (boe/d) production last year, 5% better than the 165,000 boe/d original guidance and 13% production per share growth year-over-year.
Growth company
Whitecap’s growth story is ongoing. It boasts a premium asset base (conventional light oil and unconventional liquids-rich play) and a highly economic drilling inventory. The growth company expects the Board-approved 2025 capital budget of $1.1 billion to $1.2 billion to achieve an average production of 176,000 to 180,000 boe/d this year.
In addition to the forecasted organic production per share growth of 4% to 6%, total funds flow should be around $1.6 billion to $1.7 billion (US$70/bbl WTI). Management will rely on strong operational execution to achieve its production and financial goals in 2025.
Growth opportunities are vast, although volatile crude oil prices remain the headwinds for the business. Under the five-year plan, Whitecap aims to hit $4 billion in free funds flow by 2029 (plus an incremental $800 million) from a $6 billion capital investment.
Compelling investment opportunity
Whitecap Resources is a compelling investment opportunity and a great passive income source. This top-tier mid-cap stock has never missed a monthly dividend payment post-pandemic (2021 to present). Moreover, given the 50.3% payout ratio, the generous payout should be sustainable.
