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.
Source: Getty Images
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.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| PXT | $13.57 | 736 | $1.54 | $1,134.44 | Quarterly | $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.
