High Dividend 50: Cardinal Energy

Published on November 4th, 2025 by Felix Martinez

High-yield stocks pay out dividends that are significantly higher than the market average. For example, the S&P 500’s current yield is only ~1.2%.

High-yield stocks can be particularly beneficial in supplementing income after retirement. A $120,000 investment in stocks with an average dividend yield of 5% creates an average of $500 a month in dividends.

Cardinal Energy Ltd. (CRLFF) is part of our ‘High Dividend 50’ series, which covers the 50 highest-yielding stocks in the Sure Analysis Research Database.

We have created a spreadsheet of stocks (and closely related REITs, MLPs, etc.) with dividend yields of 5% or more.

You can download your free full list of all securities with 5%+ yields (along with important financial metrics such as dividend yield and payout ratio) by clicking on the link below:

Next on our list of high-dividend stocks to review is Cardinal Energy Ltd. (CRLFF).

Business Overview

Cardinal Energy, founded in 2010 and headquartered in Calgary, is a Canadian oil and gas producer operating mainly in Alberta and Saskatchewan. The company focuses on mature, low-decline conventional fields and employs enhanced oil recovery techniques, such as water flooding and CO₂ injection, to sustain production.

Its extensive network of vertical and horizontal wells is supported by company-owned infrastructure, which helps maintain operational efficiency and cost control.

With over 90% of production coming from oil and natural gas liquids (NGLs), Cardinal’s operations are heavily oil-weighted and centered on maintenance, re-completions, and infill drilling.

As a nearly pure oil producer, Cardinal Energy is highly exposed to oil market volatility and has reported losses in five of the past 10 years, despite initiating a dividend in 2014.

However, the company benefits from having the lowest decline rate among conventional producers in Canada, allowing it to maintain reserves with lower capital expenditures than its peers.

Notably, Cardinal expanded its proved plus probable reserves by 30% last year, highlighting its strong operational efficiency and positioning the company for potential future production growth.

Source: Investor Relations

Cardinal Energy Ltd. reported solid second-quarter 2025 results despite lower oil prices. Average production was 21,184 boe/d, 3% above budget, with only one new well drilled. Adjusted funds flow was $49.4 million, mainly funding the Reford thermal project and dividends.

Net operating costs dropped 5%, while net debt rose to $227.1 million, or 0.9x adjusted funds flow. The company maintained its $0.06 monthly dividend, returning $28.9 million to shareholders.

Cardinal invested $32.3 million in the Reford SAGD project, which remains on budget and schedule, with first steam expected in late August and production targeted for early 2026.

Conventional capital spending fell 32% to $12.7 million as the company focused on completing Reford. Cardinal also continued its CO₂ sequestration efforts, storing 42,000 tonnes in the quarter, bringing its total to 5.9 million tonnes at its Midale site.

For the rest of 2025, Cardinal plans to finish Reford, start paying down related debt, and drill four new conventional wells.

The company expects stable output from its low-decline assets and plans to ramp up drilling to about 20 wells per year in 2026. Management remains focused on maintaining strong cash flow, disciplined spending, and steady shareholder returns.

Growth Prospects

Cardinal Energy has achieved one of the strongest reserve growth rates among its peers in recent years, supported by several ongoing development projects that provide room for continued expansion. The company expects average production between 21,300 and 21,700 barrels per day in 2025, roughly flat compared to last year.

However, once its new growth projects come online, Cardinal is positioned for meaningful production gains. Assuming stable oil market conditions, the company is projected to increase earnings per share by roughly 5% annually over the next five years.

Like most oil producers, Cardinal remains highly sensitive to changes in crude prices. It reported record earnings per share of $1.46 in 2021 and $1.42 in 2022, driven by strong post-pandemic oil demand and a spike in prices. With oil prices normalizing as global markets stabilized and OPEC restored output, earnings fell to $0.47 in 2024, with about $0.50 expected for 2025.

Despite this decline, Cardinal maintains a strong financial position—its interest expense represents only 3% of operating income, and its $262 million net debt equals just 32% of its market capitalization. This solid balance sheet gives the company the flexibility to navigate oil price cycles and sustain long-term stability.

Source: Investor Relations

Competitive Advantages & Recession Performance

Cardinal Energy’s main competitive advantage is its low-decline conventional oil assets, which require minimal capital to sustain production. Efficient operations, enhanced recovery techniques, and growth projects, such as the Reford thermal facility, position the company for expansion while maintaining a strong balance sheet.

During downturns, Cardinal’s low-decline assets and disciplined cost management help preserve production and cash flow. While earnings remain sensitive to oil prices, the company’s financial strength allows it to fund growth projects and maintain shareholder returns even in challenging markets.

Dividend Analysis

Cardinal Energy currently offers a dividend yield of 9.0%, almost 8 times the S&P 500 average of 1.2%. This makes the stock appealing to income investors, though the dividend carries significant risk due to oil price volatility. The company’s payout ratio stands at 104%, which is unsustainable over the long term.

However, given Cardinal’s strong financial position and manageable debt, the dividend is unlikely to be sharply reduced as long as oil prices remain stable.

From a valuation standpoint, Cardinal trades at 14.1 times its expected 2025 earnings, slightly above the fair mid-cycle price-to-earnings ratio of 9.0 typical for oil producers. If the stock reverts to that fair value over the next five years, it could face a 3.5% annual drag on returns.

Factoring in projected earnings growth of 5% per year, the 9% dividend yield, and the valuation adjustment, Cardinal could generate an estimated 10.5% average annual total return over the next five years. Overall, despite the cyclical risks of the oil industry, the stock presents an attractive long-term opportunity for investors seeking both income and moderate growth potential.

Final Thoughts

Cardinal Energy has benefited from above-average oil prices since 2021, allowing the company to deliver strong performance. The stock currently offers a 9% dividend yield, though this comes with a high payout ratio of 104%. With reasonable valuation and modest growth prospects, the stock remains attractive for income-focused investors.

However, Cardinal is highly sensitive to oil price fluctuations, making it unsuitable for those who cannot tolerate significant stock volatility. Additionally, the stock trades at low volume, which can make it difficult to enter or exit large positions efficiently.

High-Yield Individual Security Research

Other Sure Dividend Resources