For Monthly Income, a 5.4% Dividend Stock to Consider

The current geopolitical climate has created significant turbulence and could lead to further market sell-offs if the war extends. For risk-averse investors looking for financial predictability and sustained income streams, Canada’s energy sector is the place to be.  

Whitecap Resources (TSX:WCP) is a standout performer and a logical choice. In addition to the lucrative 5.4% dividend yield, the payout frequency is monthly. This top-tier energy stock can provide a solution and temper your war-driven anxiety.

As of this writing, the TSX’s energy sector is up 24.9% year-to-date, the best performance among 11 primary sectors. At $13.64 per share, WCP has kept pace with its plus-19.7% gain thus far in 2026. Also, there’s more to the high-yield and monthly dividends if you invest right now.

Financial and operational performance

The $16.5 billion high-growth producer of oil and natural gas delivered record-breaking financial results and impressive operational efficiency in 2025. Whitecap Resources’ landmark acquisition of Veren Inc. in May 2025 increased its size and scale while improving its risk profile. Increasing oil prices in 2026 could also prompt dividend growth.

In the 12 months ending December 31, 2025, total revenue (petroleum and natural gas) rose 53.7% year-over-year to $5.6 billion. The full year average production of 307,245 barrels of oil equivalent per day (boe/d) was around 10,000 boe/d over the full year guidance. Net income increased 21.2% to $984.6 million compared to 2024, while free funds flow climbed 77.3% to $888.5 million from a year ago.

Management credits the controlled and focused integration of the business combination with Veren for the exceptional operational and financial results in 2025. More importantly, Whitecap can now access premium markets and execute larger, long-term marketing agreements.

Low operating costs

Whitecap Resources is a lean operator, as evidenced by the low break-even cost of US$60 per barrel. At this WTI oil price, WCP can fully fund the entire 2026 budget and generate a free funds flow of $1.2 billion. If oil hits US$70 to US$75 per barrel, it will enable $300 million in share buybacks.

Market analysts predict supply disruptions if Iran closes the Strait of Hormuz, a vital oil shipping route. Whitecap has built-in defences through its low break-even costs. Another advantage is the deep, high-quality inventory that supports the sustainable development of light oil and liquids-rich natural gas for years to come.

According to management, Whitecap has a strong balance sheet and financial flexibility to manage price volatility. The near-term plan is to allocate capital to the highest return projects.

Earning potential

Whitecap Resources is an ideal holding for Tax-Free Savings Account (TFSA) investors. The supplemental dividend income can be incorporated into your monthly budgets to cover recurring expenses. A $21,000 TFSA will generate $94.50 in tax-free monthly passive income.

If you’re building wealth, compounding of capital is faster due to the velocity of reinvestment, 12 times a year rather than the typical 4. The same $21,000 investment will compound to $47,120.40 in 15 years through dividend reinvestment. Now is the best time to consider Whitecap Resources as your financial partner in 2026.

The post For Monthly Income, a 5.4% Dividend Stock to Consider appeared first on The Motley Fool Canada.

Should you invest $1,000 in Whitecap Resources right now?

Before you buy stock in Whitecap Resources, consider this:

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Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,155.76!*

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* Returns as of February 17th, 2026

More reading

• 2 Top Dividend Stocks to Buy in March
• How to Use Your TFSA Contribution Room to Build Monthly Cash Flow
• 2 TSX Stocks Under $20 You Want to Own Right Now
• Passive Income Investors: This TSX Stock Has a 5.4% Yield With Monthly Payouts
• Turn a TFSA Into $300 in Monthly Tax-Free Income

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Whitecap Resources. The Motley Fool has a disclosure policy.