Investing in one’s strength gives shareholders an advantage, and Canada’s strength is its fourth-largest proven oil sands reserves. This strength is the reason why the Toronto Stock Exchange has some good dividend stocks in the oil segment. Canada was severely hit after the 2016 oil crisis, as its largest customer, America, benefited from a shale gas boom, which reduced the WTI crude price from around US$100/barrel to $60/barrel.
However, the recovery in oil prices post-pandemic has revived several oil companies. Canadian oil-producing companies have offloaded significant debt and cut costs to reduce their breakeven price to US$50. Whitecap Resources (TSX:WCP) was one such stock.
This stock gives passive income per month
Most oil stocks pay quarterly dividends, but Whitecap Resources pays monthly dividends. The company used the 2021 oil price cyclicality to reduce debt. It has adopted a capital allocation strategy based on the oil price.
When the WTI crude price boosts cash flow generation, Whitecap allocates more capital to increase production. Other times, it channels more funds towards share buybacks and debt reduction. With this, the company aims to maintain a net debt-to-funds flow of 1 times.
Whitecap has no fixed dividend payout ratio, as it is subject to the oil price. That is because Whitecap Resources is more sensitive to oil prices as it does not have the cost advantage its Canadian peers have. It forecasts a funds flow of $2.9 billion at US$50/barrel and $3.3 billion at US$60/barrel. Beyond this price, its funds flow will shift by $50 million for every US$1 change in WTI.
The robust capital allocation strategy and lower debt ratio have enabled Whitecap to sustain its current annual dividend of $0.73 per share even at low commodity prices. This gives assurance of dividend sustainability, if not growth, in the future.
Buy 1,000 shares of this stock for $60.80/month in passive income
Whitecap started paying dividends in 2021 and grew them by a strong double-digit percentage as it realized a higher price for its output. However, its dividend growth stagnated in 2025 because a 10% tariff on Canadian oil exports increased costs. Gradually, the company may adopt tariff costs as the new normal and look for more ways to boost revenue.
| Year | Annual Dividend per share | YoY Growth |
| 2025 | $0.7300 | 0.1% |
| 2024 | $0.7296 | 18.2% |
| 2023 | $0.6171 | 60.2% |
| 2022 | $0.3852 | 86.8% |
| 2021 | $0.2062 |
While dividend growth may likely pause, it can sustain current dividend payouts. The oil price fluctuation also affects its share price. If the oil price falls, Whitecap’s share price falls and dividend yield increases, compensating for slow or no dividend growth. At present, Whitecap is trading near $11 per share. Buying 1,000 shares for around $11,000 can earn you $60.80 in dividends from next month onwards, which will convert to $730 in a year.
How long will this passive income last
Whitecap does not have a decade-long dividend history like its peers. However, it is a beneficiary of Canada’s rich oil sands field. As long as the WTI crude price trades above $60/barrel, this stock can keep giving you $60.80 per month.
You can consider parking your funds for the short or medium term and get a 6.8% yield, which is more than double the 1-Year Guaranteed Investment Certificate rate of 3%.
