Monthly Dividend Stock In Focus: Whitecap Resources

Updated on April 30th, 2025 by Felix Martinez

Whitecap Resources (SPGYF) has two appealing investment characteristics:

#1: It is offering an above-average dividend yield of ~9%, which is nearly six times the yield of the S&P 500.
#2: It pays dividends monthly instead of quarterly.
Related: List of monthly dividend stocks

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter, like dividend yield and payout ratio) by clicking on the link below:

The combination of an above-average dividend yield and a monthly dividend makes Whitecap Resources an appealing option for individual investors.

But there’s more to the company than just these factors. Keep reading this article to learn more about Whitecap Resources.

Business Overview

Whitecap Resources is an oil and gas company focused on acquiring, developing, and producing oil and gas in Western Canada. The company’s development programs focus on Northern Alberta and British Columbia, Central Alberta, and Saskatchewan. Whitecap Resources is headquartered in Calgary, Canada.

Whitecap Resources has some attractive characteristics. First of all, its assets are characterized by low decline rates. This is paramount in the oil and gas industry, as many producers suffer from high natural decline rates.

Source: Investor Presentation

As Whitecap Resources’ business is focused on oil and gas, it has exhibited a highly volatile performance record due to the dramatic cycles of oil and gas prices. The company has incurred material losses in four of the last ten years. Therefore, investors should carefully identify the stage of the cycle in which this business operates before investing in this stock.

Like almost all oil and gas producers, Whitecap Resources incurred substantial losses ($3.55 per share) in 2020 due to the decline in oil and natural gas prices caused by the pandemic. However, thanks to the widespread distribution of vaccines worldwide, global oil and gas consumption recovered in 2021, and the company returned to high profitability that year.

Whitecap Resources reported strong Q1 2025 results, with revenue rising to $942 million and net income nearly tripling to $163 million. Production averaged 179,051 boe/d—6% higher than last year and above internal forecasts—driven by strong performance from new wells. The company generated $48 million in free funds flow, reduced net debt to $987 million, and returned $107 million to shareholders through dividends.

Whitecap drilled 86 wells during the quarter, with strong results across both unconventional (Montney and Duvernay) and conventional assets. Glauconite and Wapiti wells outperformed expectations, aided by improved drilling efficiency and infrastructure upgrades. Capital spending totaled $398 million.

A merger with Veren Inc. is expected to close by mid-May, creating Alberta’s largest Montney and Duvernay landholder. The combined company will update 2025 guidance post-merger and focus on maintaining a strong balance sheet, delivering stable dividends, and targeting 3–5% production growth per share.

Growth Prospects

Whitecap Resources’ proved reserve lifetime is 12.2 years, which is above the industry’s average of about 10 years. In addition, thanks to the favorable characteristics of its development areas, Whitecap Resources is rapidly growing its reserve base.

Source: Investor Presentation

A double-digit production growth rate is extremely rare in the oil and gas industry. In fact, most oil majors, such as Exxon Mobil (XOM) and Shell (SHEL), have failed to grow their output for several years in a row. This is a key difference between Whitecap Resources and most oil and gas producers.

On the other hand, Whitecap Resources is sensitive to the cycles of the oil and gas industry. This is clearly reflected in the company’s volatile performance record. Over the last eight years, Whitecap Resources has grown its earnings per share by an average annual rate of only 6% and has posted losses in four of those years.

Whitecap Resources currently enjoys strong business momentum, not only due to its high production growth but also because of the Ukrainian crisis and the deep production cuts implemented by OPEC in an effort by the cartel to support oil prices. The price of natural gas has plunged this year, primarily due to an abnormally warm winter, but the cost of oil has remained above average. As a result, Whitecap Resources is likely to continue thriving this year.

Given the positive business momentum, the cyclical nature of Whitecap Resources’ business, and the high comparison base from last year, we expect approximately flat or lower earnings per share over the next five years.

Dividend & Valuation Analysis

Whitecap Resources is currently offering an above-average dividend yield of 8.9%, nearly six times the yield of the S&P 500. The stock is thus an exciting candidate for income-oriented investors, but the latter should be aware that the dividend is not safe due to the cyclical nature of the oil and gas industry.

Whitecap Resources currently has an exceptionally low payout ratio of 59.3% and a solid balance sheet, with a long-term debt-to-capital ratio of 13.7%. As a result, the stock’s dividend has a margin of safety for the foreseeable future.

On the other hand, due to Whitecap Resources’ cyclical business, its dividend is not entirely safe. Additionally, U.S. investors should be aware that the dividend received from this stock is dependent on the exchange rate between the Canadian dollar and the U.S. dollar.

In reference to the valuation, Whitecap Resources has traded at only 5.6 times its earnings per share over the last 12 months, primarily due to the above-average earnings it posted last year. We assume a fair price-to-earnings ratio of 5.0 for the stock. Therefore, the current earnings multiple is higher than our assumed fair price-to-earnings ratio. If the stock trades at its fair valuation level in five years, it will have a headwind of a 2.3% annualized loss in its returns.

Considering the flat earnings per share, the 8.9% dividend yield, and a 2.3% annualized compression of the valuation level, Whitecap Resources could offer an average annual total return of approximately 6.6% over the next five years. This is not a decent expected return, but we recommend waiting for a lower entry point to enhance the margin of safety and increase the expected return.

Final Thoughts

Whitecap Resources has much better prospects for growing its production and reserves than most of its peers and is offering an above-average dividend yield of 8.9%. Thanks to its healthy balance sheet, the company is not likely to cut its dividend in the near future, which is expected to entice some income-oriented investors.

However, the company’s performance record has been highly volatile due to its business cycles. Therefore, investors should wait for a more attractive entry point.

Moreover, Whitecap Resources is characterized by low trading volume. This means that it may be hard to establish or sell a large position in this stock.

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