Looking for Monthly Income? This 5.8% Dividend Stock Is Worth a Look

Income-focused investors are navigating an uncertain environment in 2026 due to geopolitical tensions, persistent inflation concerns, and uncertainty around the timing of interest rate cuts. As central banks remain cautious, dividend-paying stocks are back in the spotlight. And the great news is that the Toronto Stock Exchange continues to offer several high-yield opportunities, but yield alone is not sufficient. You may also want to focus on the fundamentals, cash flow coverage, and business stability while analyzing the long-term viability of an investment.

With that in mind, let me highlight a top Canadian monthly dividend stock that stands out for its potential to deliver reliable income with an attractive yield.

Cardinal Energy: An appealing monthly income stock

The dividend stock I find appealing for long-term investors right now is Cardinal Energy (TSX:CJ), a Calgary-based oil and gas company focused on low-decline production assets in Western Canada. What makes it attractive for income investors is its monthly dividend structure, which provides more frequent cash payouts compared to the typical quarterly model.

The stock currently trades at around $12.38 per share and offers a dividend yield of about 5.8%. It has also delivered strong momentum, rising 103% over the last year, reflecting improving investor confidence and stronger operational performance.

The company recently declared a monthly dividend of $0.06 per share, payable in May. This consistent payout is backed by its long-life, low-decline assets, which help Cardinal generate quite stable cash flows even in a volatile commodity environment.

Strong operations supporting cash flows

Despite macroeconomic uncertainties, Cardinal delivered solid operational performance in 2025. The company’s fourth-quarter production reached a record 23,514 barrels of oil equivalent per day (boe/d), driven in part by the successful ramp-up of its Reford 1 thermal project.

For the full year, its production remained stable at around 21,870 boe/d despite a significant 24% year-over-year reduction in capital spending. That’s an important point for income investors as the company managed to maintain output while spending less, highlighting efficiency improvements.

Meanwhile, Cardinal generated adjusted funds flow of $205 million last year, which works out to $1.27 per share. This metric is important because it reflects the cash available to fund dividends, reinvest in the business, or reduce debt. At the same time, the company paid out $116.5 million in dividends during the year, representing a payout ratio of about 94%. While that is on the higher side, it also shows its commitment to returning cash to shareholders.

Growth projects add long-term visibility

Beyond its base business, Cardinal is also investing to boost its long-term growth prospects. Its Reford 1 project reached a nameplate capacity of 6,000 barrels per day in late 2025 and has already exceeded that level in early 2026. The project is operating efficiently, with a steam-oil ratio below 2.5 times, which is considered competitive in the industry.

The company is now moving forward with its second thermal project, Reford 2, which is expected to come online in the second half of 2027. Preparatory work for this project is already in progress, including facility design and drilling plans.

For 2026, Cardinal plans to invest about $160 million and is targeting an average production of 25,000 to 25,500 boe/d. This suggests steady growth ahead, which could support its earnings growth and future dividend stability.

Foolish bottom line

Cardinal Energy offers a compelling mix of high monthly income and operational stability. Its low-decline asset base, steady production profile, and ongoing investment in growth projects support its ability to generate cash over time.

While the payout ratio and leverage levels require monitoring, the company’s consistent dividend policy and improving production outlook make it an attractive stock for investors seeking regular monthly income.

The post Looking for Monthly Income? This 5.8% Dividend Stock Is Worth a Look appeared first on The Motley Fool Canada.

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More reading

• How to Make $250 Per Month Tax-Free From Your TFSA
• 2 Canadian Stocks That Could Win Big From Rising Oil Prices

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.