The energy sector isn’t the first place investors typically look for dividend income because of its cyclical nature. However, it is a meaningfully large sector in Canada. The energy sector contributed to $282 billion or 9.8% of the Canadian nominal gross domestic product in 2024 according to Natural Resources Canada (Energy Fact Book, p7).
The energy sector can be an unpredictable place to invest. Around the oil price crash of 2016, many energy stocks slashed their dividends.
Today, we’re curious about Tourmaline Oil’s (TSX:TOU) dividends.
The nearly $25-billion market cap oil and gas producer started paying a regular dividend since 2018 that has increased over time. If you search for its dividend information on the Tourmaline Oil website or other financial information websites like TMX (TSX:X), it can be confusing, though.
Its regular dividend yields about 3.1% at $64.44 per share at writing, but including any bonus special dividends that it pay out, the actual yield could be much higher.
Here’s a simple annualized view of the dividends per share it paid out, according to Tourmaline.
| Year | Regular dividend | Special dividend |
| 2025 | $2.00 | $1.30 |
| 2024 | $1.32 | $2.00 |
| 2023 | $1.05 | $5.50 |
| 2022 | $0.90 | $7.00 |
| 2021 | $0.67 | $0.75 |
| 2020 | $0.50 | |
| 2019 | $0.46 | |
| 2018 | $0.37 |
Although it’s exciting for Tourmaline shareholders to receive special dividends, it’s important to recognize that they are bonuses on top of regular dividends. Heck, sometimes stocks even cut their regular dividends, although they certainly try not to.
How Tourmaline Oil is able to pay out special dividends is by distributing a big portion of their free cash flow, generated from high commodity prices and a well-run company that operates efficiently and is shareholder-friendly.
Currently analysts believe the stock is about fairly valued with a near-term consensus target price of $70.22, according to Yahoo Finance. The stock has consolidated since 2022 in a sideways channel. A breakout would be a positive for the stock.
Investor takeaway
Tourmaline should be on the watchlist for investors who are bullish on energy prices, particularly in natural gas prices. It could provide income plus upside, but its outsized yields depend on commodity prices. It started paying a growing regular dividend since 2018; the special dividends are a powerful — but variable — sweetener.