This 11.4% Monthly Dividend Stock is a Cash Flow Machine

This dividend stock has a super-high yield, but should investors be watching for red flags?

| More on:
Printing canadian dollar bills on a print machine

Source: Getty Images

In a world where investors are searching for income with consistency and stability, one Canadian stock stands out for its generous payouts and strong financial footing. Parex Resources (TSX:PXT) offers a dividend yield of 11.4% and continues to deliver strong results. While most high-yield dividend stocks raise eyebrows, this one earns a second look thanks to its cash flow and balance sheet.

About Parex

Parex is an oil and gas exploration and production company based in Calgary. Unlike many of its Canadian peers, its operations are concentrated in Colombia. While that may seem like a risk at first glance, the Canadian stock has been operating there for years with consistent success. It focuses on conventional oil development, which tends to be more cost-effective and predictable than more speculative plays.

At a time when energy prices have been bouncing around due to supply chain pressures and geopolitical headlines, Parex has managed to stay the course. In fact, it’s been quietly rewarding shareholders handsomely. Right now, it pays a quarterly dividend of $0.385 per share, which works out to $1.54 annually. At recent share prices, that’s a dividend yield of 11.4%.

Strong performance

In the most recent quarter, which covered Q1 2025, Parex reported net income of US$81 million. That came out to earnings of US$0.82 per share, while funds flow from operations totalled US$122 million, or US$1.24 per share. Parex’s production for the quarter averaged 43,658 barrels of oil equivalent per day. That’s within its full-year guidance range of 43,000 to 47,000 boe/d, showing the Canadian stock is hitting its targets. Alongside its dividend, the Canadian stock also bought back 524,900 shares during the first quarter.

One of the most reassuring parts of Parex’s story is its financial strength. As of March 31, 2025, the Canadian stock had US$81 million in cash and a working capital surplus of US$69 million. It has no long-term debt. In an environment where interest rates remain elevated and many firms are struggling to manage rising debt service costs, Parex’s clean balance sheet is a major advantage.

It’s also worth noting that Parex has diversified exposure within Colombia, with over three million gross acres across different basins. This isn’t a one-well company. It has built an impressive base of operations that allows it to continue drilling and developing its fields while also exploring new opportunities. In a sense, it has balanced growth with income – a combination that’s hard to find in today’s market.

Bottom line

So what’s the catch? Like any energy stock, Parex is exposed to swings in oil prices. It also operates in a country that, while stable in recent years, does have political risk. But those risks are part of the reason the yield is so attractive. And with no debt, strong cash flow, and disciplined management, the company is well-positioned to navigate whatever comes its way. So, here’s what $10,000 could earn investors right now.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYINVESTMENT TOTAL
PXT$13.57736$1.54$1,134.44Quarterly$9,989.52

For investors looking to earn real income and still participate in the energy sector’s upside, Parex Resources deserves a closer look. Its 11.4% dividend yield is not just for show, it’s supported by a rock-solid business model and strong results. When you combine that kind of yield with healthy operations, you get a rare find: a Canadian stock that actually pays you to hold it, with confidence.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Parex Resources. The Motley Fool has a disclosure policy.

More on Dividend Stocks

diversification and asset allocation are crucial investing concepts
Dividend Stocks

These Are Some of the Top Dividend Stocks for Canadians in 2026

These stocks deserve to be on your radar for 2026.

Read more »

The sun sets behind a power source
Dividend Stocks

Down 60%, This Dividend Stock is a Buy and Hold Forever

Algonquin’s refocus on regulated utilities and a reset dividend could turn a bruised stock into a steadier income play if…

Read more »

space ship model takes off
Dividend Stocks

1 Canadian Stock to Rule Them All — No Need to Find Them in 2026

This stock is so entrenched, so diversified, and so durable that it can sit at the centre of a portfolio…

Read more »

top TSX stocks to buy
Dividend Stocks

TFSA: 2 Discounted Dividend Stocks to Buy for Passive Income

These companies have increased dividends annually for decades.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Put $10,000 to Work to Earn $1,219 in Annual Passive Income

Do you have $10,000 for passive TFSA income? Manulife and Firm Capital can deliver reliable, tax-free cash flow without chasing…

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

2 Easy Canadian Stocks to Buy With $1,500 Right Now

A $1,500 capital investment is enough to buy two easy Canadian stocks and build a high-performance portfolio.

Read more »

delivery truck leaves shipping port terminal
Dividend Stocks

1 Outstanding TSX Stock Down 33% to Buy and Hold Forever

Add this TSX stock to your self-directed investment portfolio and capitalize on the temporary pullback that has made it an…

Read more »

Concept of multiple streams of income
Dividend Stocks

How to Upgrade Your Dividend Portfolio for 2026

2026 is just a few days away. For those Investors looking to seriously upgrade their dividend portfolio, now is the…

Read more »