Finding excellent dividend stocks with relatively high yields compared to other assets in the fixed income world is one thing. Finding such companies that pay out yields of, say, 7% while also paying such dividends monthly â that’s a harder ask.
Whitecap Resources (TSX: WCP) is one such company with a 7% dividend yield I’m growing more bullish on in this current environment.
Let’s dive into why this monthly dividend stock is one long-term investors ought to consider right now, and where Whitecap could be headed from here.
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Consistency is the key
In this current macro backdrop, nothing really truly is certain. There are a number of world leaders out there that appear to be focused on providing instability rather than stability. So, in one’s investment portfolio, focusing on companies that have rock-solid balance sheets and stable growth outlooks is important.
Whitecap Resources certainly fits this bill, with solid financial health and operating momentum. The company reported strong revenue growth over the past year (up 9%), with commodity prices not necessarily playing ball at all times over the course of the year.
And while I’m bullish on commodity prices likely rising over the medium-term, I’m also aware there are risks on this front. That’s where Whitecap Resources’ operating efficiency steps in, with a lower price-per-barrel breakeven rate than many similarly-sized competitors out there.
So long as Whitecap can continue to deliver mid-to-high single-digit growth rates, this is a stock I think is worth considering here.
A valuation to write home about
The other key factor driving my positive outlook on Whitecap Resources (and a few other select energy names right now) is the very low valuations the market is currently ascribing to energy companies. Trading at just 7 times trailing earnings (and even cheaper on a forward basis), this is a stock I’d put not only in the monthly dividend bucket, but also the value bucket.
As such, I think investors looking for true value in this market and wanting to book a 7% dividend yield (paid monthly) from an undervalued stock ought to take a look at Whitecap Resources right now.
