E This Canadian Oil Stock Yields 8% And Pumps Out Monthly Dividends

Investors with a long investing time horizon typically focus on growth stocks. But investors with a shorter investing time horizon, such as those in or near retirement, should focus on income.

Stocks that pay high dividend yields can help replace lost income in retirement. While the S&P 500 Index, on average, yields just 2%, investors can do much better than that by buying individual stocks with high yields.

For example, the Canadian energy company Vermilion Energy (VET) has a dividend yield above 8%. Even better, the company pays its dividend each month. Monthly dividend stocks provide their shareholders with 12 dividend payments each year, as opposed to four payments for companies on a quarterly dividend schedule. This makes Vermilion an attractive stock for income investors.

Gushing Cash Flow And Production Growth

Vermilion Energy was founded in 1994. Today, the company is based in Canada and is engaged in the exploration and production of oil and natural gas. It has operations in Canada, the U.S., Australia, France, Ireland, Germany, and the Netherlands. Vermilion primarily focuses on light oil and liquids-rich natural gas resource plays in Canada and the U.S., natural gas opportunities in the Netherlands and Germany, and oil drilling in France and Australia. One of the company’s most significant international asset plays is its 18.5% interest in the Corrib gas field in Ireland.

Vermilion’s competitive advantage is its high-quality oil and gas assets. Approximately 62% of the company’s production comes from North America, with 33% in Europe and 5% in Australia. Vermilion’s oil and gas properties have low rates of decline and hold significant amounts of reserves. This allowed the company to grow production by 15% per year from 2013 to 2019, while reserves increased 23% per year from 2013 to 2017.

On October 25th, the company reported very strong third-quarter results. Revenue increased 29% from the same quarter last year. Revenue growth was attributable to higher commodity prices, and also a 19% year-over-year increase in production. The increase was also due to the $1.4 billion acquisition of oil producer Spartan Energy Corp. Fund flows from operations (FFO) increased 99% from the same quarter a year ago.

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