Canadians looking to beat the TSX index could consider investing in high-quality dividend stocks poised to grow their payouts through market cycles. In the last 10 years, the TSX index has returned 126% to shareholders. However, if we adjust for dividend reinvestments, cumulative returns are closer to 204%.
Comparatively, Tourmaline Oil (TSX:TOU) has returned 256% to shareholders in dividend-adjusted gains since November 2015. Valued at a market cap of $23.6 billion, Tourmaline is engaged in the acquisition, exploration, development, and production of petroleum and natural gas properties in the Western Canadian Sedimentary Basin. It holds interests in properties located in the Alberta Deep Basin, Northeast British Columbia Montney, and the Peace River High Triassic oil complex.
Despite its market-beating returns, the TSX energy stock is down almost 28% from its all-time highs, giving you a chance to buy the dip. Let’s see why you can beat the TSX with this cash-gushing dividend stock in your equity portfolio.
How did the TSX stock perform in Q3 of 2025?
Tourmaline Oil delivered third-quarter (Q3) production of 634,750 barrels of oil equivalent (BoE) per day at the high end of guidance despite facing the weakest AECO (Alberta Energy Company benchmark) natural gas prices in over 30 years.
The Canadian producer posted cash flow of $720 million and earnings of $190 million during a challenging quarter plagued by major pipeline maintenance shutdowns that forced significant volumes into depressed local spot markets.
Tourmaline curtailed production during the worst pricing days but sustained low prices at AECO and Station 2, averaging just $0.64 and $0.48 per thousand cubic feet, respectively, which negatively impacted Q3 results.
Pipeline maintenance on both East Gate and West Gate export routes reduced Tourmaline’s access to premium markets, including the Gulf Coast and Western United States, by approximately 155 million cubic feet per day.
These volumes instead sold into weak AECO and Station 2 spot prices, meaningfully impacting September natural gas revenue. The silver lining emerged in early October as the Great Lakes pipeline force majeure ended and East Gate exports returned to normal levels. West Gate maintenance wrapped up in November, setting the stage for improved Q4 pricing.
Looking ahead, AECO pricing for the second and third quarters of 2026 currently averages $3.00 per thousand cubic feet compared to just $1.18 during the same period in 2025. Management expects further basis tightening as liquefied natural gas demand in Canada creates additional capacity on local pipelines.
The company enhanced its strategic positioning through a 10-year natural gas storage agreement with AltaGas at the Dimsdale facility, providing access to six billion cubic feet of storage capacity starting in April 2026, with potential expansion to 10 billion cubic feet.
Tourmaline is pursuing the sale of its Peace River High light oil and gas complex to reduce corporate operating costs further and redirect capital toward higher-margin British Columbia growth assets.
It maintains its 2026 production guidance of 690,000 to 710,000 barrels of oil equivalent per day and its multi-year plan targeting 30% production growth to 850,000 barrels of oil equivalent per day by 2031.
The board declared a special dividend of $0.25 per share payable on November 25, alongside plans for the regular quarterly base dividend of $0.50 per share in December.
Management emphasized fiscal discipline, stating clearly that it will not use the balance sheet to fund special dividends going forward.
What is the price target for the TSX dividend stock?
Analysts tracking the TSX stock forecast free cash flow to expand from $1 billion in 2024 to $1.80 billion in 2029. If TOU stock is priced at 25 times forward FCF, which is lower than the five-year average of 26.6 times, it should gain around 100% by the end of 2028.
