Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
While TSX energy, industrials and mining stocks rewarded investors year-to-date, more than half of the 2024 TSX 30 Index winners are oil and gas companies. For those who don’t have much of an investment appetite at the moment, here are two low-priced, dividend-paying energy stocks to consider adding to the portfolio, where a simple C$500 investment can be exchanged for recurring dividend income and the potential for a significant rise in share price.
Tamarack Valley Energy ( TSX:TVE ) has substantial assets in the Clearwater region of west-central Alberta, which is the most economically important oil extraction area in North America. What’s more, the C$2.4 billion oil and gas company just completed a strategic turnaround last year, paving the way for a sustained, predictable path of growth in shareholder returns.
As a result of solid earnings and growing cash flow, the Board of Directors approved a dividend policy on 27 October 2021 and declared its first monthly dividend.
Earnings show that for the first three quarters of 2024, the company’s revenues increased slightly by 1% year-on-year to C$1.29 billion, net income increased by 323% year-on-year to C$155.83 million, while free funds flow increased by 69% over the same period in 2023 to C$297.7 million. Tamarack’s net debt also decreased by 28% year-on-year to C$297.7 million.
Shares of Tamarack are up 49.56% year-to-date, with an overall return of 181.81% over the last five years and a compound annual growth rate (CAGR) of 22.98%. The energy stock currently has a dividend yield of 3.38% and pays a monthly dividend. Based on market analysts’ average 12-month price target of $5.46, the upside potential is 18.7%.
Headwater Exploration ( TSX:HWX ) also operates in Clearwater and McCully Fields in New Brunswick. The C$1.63 billion resource company is engaged in oil and gas exploration, development and production. The company’s net income from operations has continued to grow each year since 2021.
In the third quarter of 2024, Headwater Exploration reported a 13% year-over-year increase in average production to a record 20,342 barrels of oil equivalent per day (boe/d). For the nine months ended 30 September 2024, the company’s net income increased 20.5% year-on-year to C$139.1 million.
Management said the board has approved a $20 million increase in 2024 on top of the C$200 million capital programme, which will continue to stabilise the company’s cash flow. The company’s key objectives include maintaining financial flexibility and deploying capital to provide shareholders with an appropriate return on their investment.
The stock is currently trading at C$6.85 (up 14.39% year-to-date) with a dividend yield of 5.84% (paid quarterly). Headwater Exploration is ranked #16 on the 2023 TSX 30 list, and the stock has delivered a total return of 930.86% over the last five years (a CAGR of 59.33%).
