An example of such a TSX dividend stock is Whitecap Resources (TSX:WCP), which gives you a forward yield of 6.2%. Whitecap, with a market capitalization of $14.2 billion, engages in the acquisition, development and production of oil and natural gas properties and assets in Western Canada.
Founded in 2009, Whitecap has built a significant base of light oil resources, providing a solid foundation for steady growth. The asset portfolio offers stable production and low base decline rates, providing shareholders with predictable cash flow for monthly dividend payments.
A strong performance in the third quarter of 2025
Whitecap Resources continues to deliver impressive results following the integration of Veren Energy. In the third quarter (Q3) of 2025, Whitecap reported production of 376,000 barrels of oil equivalent per day (BoE/d).
The Canadian oil and gas producer has increased its full-year 2025 production guidance to 305,000 BOE per day, while leaving its $2 billion capital budget unchanged. Management expects production to reach 370,000 BoE per day in the fourth quarter, demonstrating increasing operating momentum across the combined asset base.
The real story here is how quickly Whitecap was able to leverage synergies from the Veren deal. The company now expects a total of $300 million in synergies by 2026, an increase of 40% from the original estimate of $210 million.
Capital synergies of approximately $130 million were driven by better purchasing practices, improved operational efficiencies and optimized rig scheduling. Operating cost savings were $135 million, which is $60 million above initial forecasts, thanks to wins in overlapping activities and sharing of best practices. Business synergies added another $35 million through cuts in overhead, compensation costs and interest expense.
Looking ahead to 2026, Whitecap pegged its capital budget at between $2 billion and $2.1 billion, a sharp decline from a previous projection of $2.6 billion. This lean spending plan still targets an average production of 370,000 to 375,000 BOE per day, with an outflow rate of more than 380,000 BOE per day.
The unconventional division will get 75% of the capital to drill about 100 wells, while conventional operations will get the remaining quarter to drill about 155 wells.
At current strip prices of $60 WTI (West Texas Intermediate) and $3 AECO (Alberta Energy Company benchmark), Whitecap expects to generate $3.3 billion in cash flows next year.
After capital expenditures of $2.1 billion, that leaves $1.2 billion in free cash flow. The company plans to pay out $900 million in dividends and buy back $300 million in shares, which would reduce its share count by another 2% and improve its per-share numbers. The dividend currently yields approximately 6.2% annually at $0.73 per share.
Is the TSX Dividend Stock Undervalued?
Whitecap’s balance sheet is quite robust, as the company ended the third quarter with $3.3 billion in net debt. Management forecasts a shareholder return of 12% if WTI is around $60 per barrel, rising to 15% at $70 per barrel.
According to consensus estimates, Whitecap is expected to improve its free cash flow from $900 million in 2025 to $1.45 billion in 2029. If the TSX dividend stock is priced at 13 times FCF forward, which is similar to its current valuation, it should rise 30% over the next three years. If we adjust the dividends, the cumulative return could be closer to 50%.
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