Investing in dividend shares with a sustainable month-to-month payout lets you create a passive revenue stream at a low value. Nevertheless, it’s important to determine high-quality corporations positioned to generate money flows and keep dividend payouts even throughout financial downturns.
One such TSX dividend inventory is Whitecap Assets (TSX:WCP), which provides you a ahead yield of 6.2%. Valued at a market cap of $14.2 billion, Whitecap is engaged within the acquisition, improvement, and manufacturing of petroleum and pure fuel properties and belongings in Western Canada.
Based in 2009, Whitecap has assembled a major mild oil useful resource base, offering a stable basis for regular development. Its portfolio of belongings provides steady manufacturing and low base-decline charges, offering shareholders with a predictable money stream stream for month-to-month dividend funds.
A robust efficiency in Q3 of 2025
Whitecap Assets continues to ship spectacular outcomes following its integration of Veren Power. Within the third quarter (Q3) of 2025, Whitecap reported manufacturing of 376,000 barrels of oil equal per day (BoE/d).
The Canadian oil and fuel producer has raised its full-year 2025 manufacturing steering to 305,000 BOE per day whereas retaining its $2 billion capital finances unchanged. Administration expects fourth-quarter output to succeed in 370,000 BoE per day, demonstrating the operational momentum constructing throughout the mixed asset base.
The actual story right here is how shortly Whitecap captured synergies from the Veren deal. The corporate now initiatives $300 million in complete synergies for 2026, a 40% leap from the unique $210 million estimate.
Capital synergies of roughly $130 million had been pushed by higher procurement practices, improved operational effectivity, and optimized rig scheduling. Working value financial savings reached $135 million, operating $60 million above preliminary forecasts, pushed by wins in overlapping operations and sharing finest practices. Company synergies added one other $35 million via cuts in overhead, compensation prices, and curiosity bills.
Waiting for 2026, Whitecap set its capital finances between $2 billion and $2.1 billion, down sharply from an earlier projection of $2.6 billion. This lean spending plan nonetheless targets a median manufacturing of 370,000 to 375,000 BOE per day with an exit price exceeding 380,000 BOE per day.
The unconventional division will get 75% of the capital to drill about 100 wells, whereas typical operations obtain the remaining quarter to drill roughly 155 wells.
On the present strip pricing of $60 WTI (West Texas Intermediate) and $3 AECO (Alberta Power Firm benchmark), Whitecap expects to generate $3.3 billion in funds stream subsequent yr.
After capital spending of $2.1 billion, that leaves $1.2 billion in free money stream. The corporate plans to return $900 million via dividends and purchase again $300 million value of shares, which would scale back the share depend by one other 2% and increase per-share metrics. The dividend at the moment yields round 6.2% yearly at $0.73 per share.
Is the TSX dividend inventory undervalued?
Whitecap’s stability sheet is sort of sturdy, given it ended Q3 with a web debt of $3.3 billion. Administration forecasts shareholder returns of 12% if WTI is round $60 per barrel, rising to fifteen% at $70 per barrel.
In accordance with consensus estimates, Whitecap is projected to enhance its free money stream from $900 million in 2025 to $1.45 billion in 2029. If the TSX dividend inventory is priced at 13 occasions ahead FCF, which has similarities to its present valuation, it ought to achieve 30% over the following three years. If we modify for dividends, cumulative returns could possibly be nearer to 50%.
