Canadian oil and gas stocks have faced a rollercoaster ride over the past few years.
However, analysts remain optimistic about the sector, and there are signs that oil and gas companies in Canada may be in a multi-year bull market. The top oil and gas stocks on the TSX and TSXV have been posting gains despite volatile market conditions, and many companies offer strong payouts for dividend investors.
Canadian energy stocks that pay dividends — a portion of corporate profits shared on a specific timeline — are attractive to those who prefer a long-term approach to wealth creation. Dividend investing allows for a steady flow of income and the opportunity to increase equity holdings.
Investors should look for stocks with high dividend yields, which is based on annual dividend income per share divided by price per share. For example, if a dividend stock has a share price of C$10.00 and pays a C$0.25 dividend every quarter, it has a dividend yield of 10 percent. Of course, as share prices fluctuate, so too will dividend yields, so investors should perform due diligence when choosing which company to invest in.
The ability to offer a dividend payment points to the financial health of a company, making it a point of pride for companies in the oil and gas industry.
1. Cardinal Energy (TSX:CJ)
Dividend yield: 10.6 percent
Debt-to-equity ratio: 0.08
Market cap: C$1.08 billion
Cardinal Energy is an oil-focused company with operations centered on low-decline light, medium and heavy oil in Alberta and Saskatchewan, Canada. It also produces liquid and conventional natural gas.
The company reported that its Q3 2024 production decreased by 3 percent from the previous quarter to 21,128 barrels of oil equivalent per day (boe/d) ‘as planned Company owned and unplanned third-party facility turnarounds impacted the third quarter production.’
Cardinal Energy pays a monthly dividend of C$0.06 per share. Its January dividend will be paid on February 18, 2025, to shareholders of record as of January 31.
2. InPlay Oil (TSX:IPO)
Dividend yield: 10.11 percent
Debt-to-equity ratio: 0.2
Market cap: C$160.41 million
InPlay Oil is an oil and natural gas company with operations concentrated in West Central Alberta. In its financial and operating highlights for the period ending September 30, 2024, the company reported that its average production for the quarter came in at 8,206 boe/d, down from 8,657 in the prior quarter due in part to shut-ins on natural gas production with the plan of bringing it online during the winter season, which sees higher prices.
InPlay pays a monthly dividend of C$0.015 per share. It will pay its next dividend on January 31, 2025, to shareholders of record as of January 15.
3. Petrus Resources (TSX:PRQ)
Dividend yield: 8.33 percent
Debt-to-equity ratio: 0.2
Market cap: C$180.16 million
Petrus Resources has developed an extensive inventory of low risk oil and natural gas development assets in Alberta. Its operating areas are Ferrier, North Ferrier and Thorsby. For the period ending September 30, 2024, the company reported average production of 9,215 boe/d, a 3 percent drop from production reported in the previous quarter due to scheduled maintenance and ‘strategic shutins due to low natural gas prices.’
Petrus Resources began paying dividends in Q4 2023 and pays a monthly dividend of C$0.01 per share. The company will pay its next dividend on January 31, 2025, to shareholders of record as of January 15.
4. Surge Energy (TSX:SGY)
Dividend yield: 8.18 percent
Debt-to-equity ratio: 0.31
Market cap: C$613.33 million
Surge Energy is an oil-focused exploration and production company with assets in two of Canada’s premiere conventional oil growth plays: Sparky and SE Saskatchewan. In its financial and operating highlights for the period ending September 30, 2024, the company reported that in Q3 average production increased from the previous quarter to 23,795 boe/d.
Surge Energy pays a monthly cash dividend, which it raised from C$0.04 to C$0.043 per share in June 2024. On February 18, 2025, the company will make its next dividend payout, which will be made to shareholders of record as of January 31.
5. Peyto Exploration & Development (TSX:PEY)
Dividend yield: 7.78 percent
Debt-to-equity ratio: 0.5
Market cap: C$3.36 billion
Last on this list of top Canadian oil and gas dividend stocks is Peyto Exploration & Development, which conducts unconventional natural gas exploration, development and production in the Deep Basin in Alberta. The company reported that its Q2 2024 production volumes averaged 120,031 boe/d, up 23 percent year-over-year, which it attributed mainly to the Repsol Canada Energy Partnership acquisition that closed in Q4 2023.
Currently, Peyto pays its shareholders a monthly dividend of C$0.11 per common share, and plans to make a dividend payout on February 14, 2025, to shareholders of record as of January 31.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.