Dividend investing is a popular strategy among passive income investors, including retirees. Many TSX companies are dividend-payers, and most of them pay quarterly dividends. However, if you need cash flow to add to your regular income, Whitecap Resources (TSX:WCP) and Mullen Group (TSX:MTL) can pay you monthly.
Besides the attractive dividend yields, the companies have never missed a monthly payout in the last 10 years. Budgeting and planning for future financial needs should also be easy because of the monthly income streams. More importantly, the dividends are sustainable, given the low payout ratios (less than 42% for both stocks).
Growth and cash generation engines
Whitecap Resources operates in North Alberta (West Division) and Central Alberta (East Division). The $7 billion oil-weighted growth company boasts a premium asset base and an extensive resource base in Canada serving as growth and cash generation engines.
According to management, the light oil resource base is a solid foundation for growth. The stable production from the low decline asset base generates predictable cash flow streams and supports Whitecapâs internally funded business model. The primary focus is to achieve sustainable long-term growth and deliver total shareholder return.
Since Whitecap has exposure to commodity price fluctuations and currency exchange rates, its risk management program provides some measure of stability to the capital development program and dividends. In August 2022, management promised to increase dividends if it met net debt targets of $1.8 billion in January 2023 and $1.3 billion before September 30 2023.
Whitecap achieved the first net debt milestone and is on track to hit the second target. As such, the Board approved a 26% increase to the energy stockâs monthly dividend. If you invest today, the share price is $11.53, while the dividend yield is 5.01%. Whitecap is beating the broader market year to date, up 11.9% versus 6%.Â Â Â Â Â Â Â
Whitecap owns and operates two carbon dioxide (CO2) sequestration projects (Weyburn and Joffre). The projects inject CO2 underground to increase oil production from oil reservoirs. Currently, the company stores around two million tonnes of CO2 annually. As a world-class CO2 sequestrator, Whitecap is a clean energy company, too.
The best opportunity for growth
Mullen provides transportation, warehousing, and distribution services in North America. The $1.3 billion logistics company operates a decentralized business model whereby it hopes to achieve superior profitability. Wholly owned companies and limited partnerships comprise the autonomous business units.
Management firmly believes that Mullen has the best opportunity for growth with business units serving different sectors. The Less-Than-Truckload (LTL) unit has an extensive terminal network that serves local and regional markets. Its Logistics & Warehousing (L&W) unit provides shippers with leading-edge technology solutions.
The Specialized & Industrial Services (S&I) segment caters to the construction, energy, infrastructure, and natural resources sectors. In the United States, U.S. & International Logistics (US 3PL) provides third-party logistics, which is a vital component of the supply chain.
In Q2 2023, Mullen increased its dividend by 5.88%. At $14.09 per share (0.05%+ year to date), you can partake in the lucrative 5.11% dividend yield. Â Â Â
Whitecap Resources and Mullen Group are more than reliable passive income providers but also ideal options for long-term investors. You can build wealth or retirement funds over time and compound money faster by reinvesting the dividends 12 times a year.
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* Returns as of 8/16/23
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mullen Group. The Motley Fool recommends Whitecap Resources. The Motley Fool has a disclosure policy.