“Cash is king.” It’s what we hear again and again, especially in the world of investing. And true enough, when we get into investing, what we want at the end of the day is cash on hand. That’s cash we can use for emergency funds, investing further, or supporting even our day-to-day lives.
Yet that can lead many investors to chase yields instead of fundamentals. That’s why today, we’re going to focus on a dividend stock in the energy sector. While it might not have the highest dividend yield out there, it offers stability. So, let’s get into why Gibson Energy (TSX: GEI) could be one of the best investments of 2025.
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About GEI
First, let’s look back just a little. Gibson Energy was founded in 1953 as Gibson Petroleum Marketing Company. It was one of Canada’s earliest midstream energy firms, focused on the transport and marketing of crude oil.
Since then, it’s expanded into storage, pipelines, terminals, and more services. It went on to rebrand as Gibson Energy in 2002, going public in 2011. Now, it operates as a stable investment in the oil and gas sector and is one of the best dividend stocks money can buy. This is due to its extensive operational infrastructure, which includes major terminals and storage facilities spanning from Alberta to Texas, with additional facilities on the way.
Into earnings
The energy stock might be older, but don’t let that count it out for your income portfolio. The dividend stock recently reported second-quarter earnings that show just how strong the stock is. GEI reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $153 million, driven by an increase in throughput and cost-saving initiatives.
Furthermore, net income hit $61 million, a slight decrease due to lower marketing adjusted EBITDA. However, the Gateway dredging project was completed on time and within budget during this time. It’s now increasing the terminal’s capacity by 20%, hitting new volume records!
Looking ahead
All this speaks to how the company is now focused on the future. Not only will it likely see even more capabilities for handling large-scale shipments, but there are more on the way. There were significant turnarounds at the Moose Jaw Facility as well as the Hardisty Diluent Recovery Unit, again on time and under budget.
What’s more, the dividend stock has, you guessed it, a dividend. Right now, the company has a forward dividend of 6.71%. This is supported by a payout ratio of 83%, making GEI a solid passive-income play. In fact, a $7,000 investment could bring in annual dividends of $462!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| GEI | $26.00 | 269 | $1.72 | $462.68 | Quarterly | $6,994.00 |
Bottom line
As GEI continues to complete its major projects like Gateway and bring down costs, the dividend stock is paving the way for future growth. Its infrastructure assets and strong financial management also make it a stable investment, especially in the energy sector.
While dividends aren’t everything, including high yields, that income is certainly nice while the energy stock works on more growth. That growth looks likely, as expanding infrastructure projects and maintaining finances provide a solid path forward.
