Guaranteed income certificates, or GICs, are an ideal financial product for low-risk retirees. The money is safe, and the payout is fixed. However, you receive the interest at maturity, which could be a year away.
However, Canadian retirees with a higher risk appetite who want to start a low-cost passive income stream should consider owning quality dividend stocks with monthly payouts.
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Why a monthly dividend stock appeals to Canadian retirees
In retirement, you need to supplement pension payouts such as the Canada Pension Plan and Old Age Security with other income sources. A monthly dividend stock ticks most boxes for retirees.
In 2026, several GICs offer you an interest rate of 3.7%. One TSX dividend stock with a similar yield is Whitecap Resources (TSX: WCP). However, beyond consistent dividend income, you’re also positioned to benefit from capital gains. Over the last five years, WCP stock has returned 250% to shareholders after accounting for dividend reinvestment.
A key difference is that a GIC protects your principal, while a stock can be volatile.
In Q2 2026, supply chain disruptions and elevated oil prices enabled Whitecap to increase revenue 93% year over year. Its funds flow surged to a record $1.4 billion, or $1.11 per share. After accounting for capital spending, free funds flow stood at $925 million, while the dividend expense was roughly $220 million.
The dividend payout ratio in Q2 was less than 25%, allowing the company to reinvest in growth and strengthen the balance sheet.
The company reduced operating costs by 13% year over year to $11.88 per barrel of oil equivalent, and operating netback, which is profit per barrel, rose 48% to $43.84.
Production averaged 388,894 barrels of oil equivalent per day, about 8,000 BOE per day above the company’s forecast. Management raised its 2026 production guidance for the second time this year, to 385,000 BOE per day.
How Whitecap’s debt reduction protects the dividend
In the first six months of 2026, Whitecap has reduced net debt by $900 million to $2.5 billion. The management expects net debt to be closer to $2 billion by the end of 2026.
A company with lower leverage and growing cash flow has more room to maintain dividends if commodity prices decline amid a downturn.
With West Texas Intermediate prices at US$65 to US$75 as a midcycle level, Whitecap expects production per share to grow by 3% to 5%.
CFO Thanh Kang told analysts:
We can support the dividend and increase it with the increasing cash flows that we’re generating.
Whitecap expects to raise the dividend by 1% to 2% over the long term and reduce the share count via buybacks by at least 2% each year.
Notably, Whitecap has hedged 33% of its second half 2026 net crude oil volumes at about $94 a barrel.
Risks retirees should weigh before buying WCP stock
Every investment, including Whitecap, carries risk. For instance, liquids accounted for 61% of production and 93% of sales. If oil prices normalize, expect revenue growth to decelerate or even decline over the next 18 months.
CEO Grant Fagerheim was candid about the uncertainty. He told analysts management must think about where oil, the Canadian dollar, and condensate prices go over the longer term.
Further, dividends are never guaranteed and can be suspended or cut amid economic downturns.
So, treat Whitecap as one piece of an income plan. The ideal plan for retirees is to supplement GIC investments with quality dividend stocks like Whitecap, which offers portfolio diversification.
