With all the volatility dominating global markets right now, there are plenty of reasons why some investors may be concerned about what the future may hold. Inflationary pressures are picking up, as oil prices continue to surge due to ongoing geopolitical conflicts in the Middle East.
That said, there are some companies like Whitecap Resources (TSX: WCP) that I continue to think are excellent long-term bets.
Here’s why I think Whitecap’s monthly dividend makes it a top yield-producing option for investors right now.
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Is there a bubble building in energy stocks?
I think there’s something to be said about the euphoria we’re starting to see from certain corners of the market around energy stocks as a whole. In some regards, there’s a good reason for the investor perspective that more energy exposure is better than less right now.
For one, surging commodity prices (namely, oil and gas) have led companies like Whitecap to see record profitability. In many cases, energy producers have passed these increased profits off to investors in the form of dividends. Indeed, Whitecap’s monthly dividend yield that’s still above 4.5% is impressive, considering this is a stock that’s seen remarkable triple-digit returns over the past year.
Thus, while there are plenty of naysayers and pundits suggesting a bubble may be brewing in the energy market (and I think there’s something to that idea), I also think that top-quality mid-tier producers with solid cash flow at lower breakeven prices per barrel, such as Whitecap, could continue to outperform.
Why Whitecap?
Whitecap’s record 2025 results speak volumes about the company’s ability to thrive in any sort of commodity price environment. With fund flows of nearly $3 billion last year, and double-digit total returns seen on most financial metrics, this is a stock that’s deserving of its rapid recent rise.
Accordingly, for those who expect to see oil prices continue to head even higher, this is a stock with ample leverage to these trends. That’s why I think so many investors are considering loading up on shares of WCP stock right now. Insofar as recent trends are concerned, Whitecap is one stock that’s perhaps the best-positioned and most fundamentally sound of many out there, making this a quality pick for those seeking monthly income, value, or growth. Personally, I like all three, and Whitecap checks all the boxes for me.
What about Whitecap’s valuation?
A 4.5% dividend yield paid monthly is great. But if investors have to put too many of today’s dollars to work to achieve this yield, one could argue that going with much safer government bonds (many of which carry very similar yields) could be the better way to go. Indeed, valuation always matters, but perhaps more today than at other points in the market cycle, given where the current market valuation sits.
On this front, Whitecap still looks like a steal. With a forward price-to-earnings ratio still in the single digits, this is a stock that could have much more upside potential no matter where energy prices are headed.
Outside of a major shock that takes commodity prices lower, I think the trend will remain to the upside for holders of WCP stock. That’s why this company remains a top pick of mine right now.
