Anyone building a portfolio for dependable passive income would love to get paid every single month. While most dividend stocks pay quarterly, monthly payments can make things easier, especially for retirees or investors who like to reinvest right away. Of course, the real challenge is finding a company that can actually afford to keep paying that monthly dividend.
Companies with stable production and disciplined spending often have a better shot at supporting generous payouts. One Canadian monthly dividend stock that fits this description is Cardinal Energy (TSX:CJ), which currently offers a juicy annual yield of more than 7%.
Cardinal Energy: Built for steady monthly income
If you don’t know it already, Cardinal Energy is based in Calgary, and it primarily focuses on oil and natural gas assets in Western Canada. What makes it interesting for income investors is its low-decline production profile. In simple terms, its wells do not lose output as quickly as many others do. That means the energy firm does not have to spend aggressively just to keep production going. These lower reinvestment needs help protect its free cash flow and dividend.
Cardinal produced an average of 20,772 barrels of oil equivalent per day in the third quarter of 2025. Its production included light oil, medium and heavy oil, natural gas liquids, and conventional natural gas. This mix gives it some diversification within the energy sector.
These strong operations have helped CJ stock trend higher. After rallying by nearly 50% over the last year, it currently trades at $9.47 apiece, giving it a market cap of about $1.6 billion.
More importantly for income investors, it offers a 7.6% annualized dividend yield at this market price, paid monthly.
A look at its financial performance and cash flow
Last quarter, Cardinal generated $127 million in petroleum and natural gas revenue. Meanwhile, its adjusted funds flow came in at $47.3 million.
Although the company’s adjusted funds flow declined 28% YoY (year over year), it was mainly because realized commodity prices were down 13% and production was slightly lower. Even so, it remained solidly cash flow positive.
Meanwhile, the company also kept a close eye on costs. Its net operating expenses improved to $24.05 per barrel of oil equivalent in the latest quarter, a 1% improvement from the year before. At the same time, it managed to reduce its development capital expenditures by 21% YoY to $26.3 million, reflecting disciplined spending.
Strong growth prospects in 2026 and beyond
One of the biggest growth drivers for Cardinal is its Reford steam-assisted gravity drainage (SAGD) thermal project in Saskatchewan. During the third quarter, the company invested $14.4 million as the project moved into the production phase. Its construction and commissioning were completed on budget and ahead of schedule.
Early results suggest the reservoir is performing well, and initial oil volumes look promising as production ramps up.
Cardinal Energy expects Reford to make a meaningful contribution in 2026. At a US$65 West Texas Intermediate (WTI) crude oil price, the added production is projected to generate about $100 million in adjusted funds flow this year. That extra cash could lower the company’s overall breakeven point, strengthen dividend coverage, and create more flexibility to reduce debt or reinvest in the business, making it the top Canadian monthly dividend stock to consider in 2026.
