Canadian investors looking for stocks that pay cash every month could consider monthly dividend stocks. These regular payouts can provide a dependable income stream, much like receiving a monthly paycheque.
However, payment frequency is only part of the equation. The best monthly dividend stocks offer attractive yields with durable business models, healthy cash flows, and the financial flexibility to maintain their payouts through changing economic conditions. Companies with these qualities are far more likely to reward shareholders consistently over the long run.
That’s why you should look for TSX stocks backed by proven operating performance, disciplined capital allocation, and a history of reliable distributions.
One TSX dividend stock checks all these boxes. It currently offers an attractive 4.8% dividend yield, pays shareholders every month, and has the fundamentals to sustain its payouts.
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Whitecap offers a 4.8% yield and pays every month
While the TSX has only a handful of stocks that pay cash every month, Whitecap Resources (TSX: WCP) stands out for its solid distribution history, compelling yield, and ability to sustain its payouts.
Whitecap has been rewarding shareholders through commodity cycles with steady monthly payouts. Since January 2013, the energy company has returned more than $3.2 billion to shareholders through dividends, highlighting the strength of its operations and cash-generating ability.
A diversified portfolio of high-quality assets, disciplined capital spending, and efficient operations have enabled Whitecap to generate healthy cash flow even in challenging market environments. That financial strength provides a solid foundation for maintaining its monthly dividend.
Whitecap’s acquisition of Veren has further strengthened its growth profile. The transaction expanded Whitecap’s production base, increased operational scale, and created opportunities for additional efficiencies, all of which are likely to drive stronger free cash flow over time.
Today, Whitecap pays a monthly dividend of $0.061 per share, yielding over 4.8% based on its closing price of $15.05 on June 29.
Whitecap delivers solid Q1, well-positioned to sustain payouts
Whitecap Resources delivered a strong Q1, led by higher production and benefits from its recent acquisition of Veren. The company produced an average of 391,416 barrels of oil equivalent per day during Q1, surpassing its original guidance. Strong well performance, resilient base production, and improved operational execution all contributed to the stronger-than-expected results.
Whitecap’s growth received a significant boost from the Veren acquisition. Quarterly funds flow topped $1 billion, while funds flow per share increased 12% year over year. Higher production volumes, stronger realized commodity prices, and lower operating costs all helped drive the improvement.
Whitecap also continued to strengthen its balance sheet while returning substantial capital to investors. The company paid $221 million in dividends during the quarter and reduced net debt to $3.2 billion, further enhancing its financial flexibility.
With growing production, robust cash flow, and a healthier balance sheet, Whitecap appears well-positioned to sustain its payouts.
The bottom line
Whitecap appears well-positioned to sustain and potentially grow its dividend over the long term, supported by its portfolio of high-quality, diversified assets and a strategy focused on increasing production.
Management targets a conservative dividend payout ratio of 20% to 25%, leaving ample financial flexibility to navigate commodity price volatility. This disciplined capital allocation approach strengthens the company’s ability to protect its dividend during market downturns and enhances its capacity to reward shareholders as cash flow grows.
