Investing in quality dividend stocks and guaranteed income certificates (GICs) are low-cost strategies to begin a passive income stream. Data from WOWA suggests the best 1-year GIC offers 3.8%, while the best five-year GIC offers 4.45%.

Comparatively, there are several TSX monthly dividend stocks that offer you a yield of more than 4% in September 2026. In addition to monthly payouts, long-term investors can also benefit from capital gains.

Moreover, the best dividend stocks also raise payouts consistently, which improves yield-at-cost over time.

GICs vs. dividend stocks

GICs are among the safest financial instruments in Canada, making them ideal for retirees with a low-risk profile. They are also a key instrument for short-term investors, since your principal is protected and the payout is certain.

On the other hand, investing in top dividend stocks offers you a steady stream of dividend income and capital appreciation via capital gains. You can withdraw dividends or reinvest payouts to benefit from compounding and a higher effective yield.

Whitecap: One of the top Canadian dividend stocks paying monthly

Whitecap Resources (TSX: WCP) is one of Canada’s largest conventional oil and gas producers. In the second quarter of 2026, it produced about 388,900 barrels of oil equivalent per day. The stock pays $0.06 per share each month, or about $0.73 a year, for a 4% yield.

In the last five years, the TSX energy stock has returned 210% to shareholders. However, with dividend reinvestment, cumulative returns are closer to 313%. Notably, the annual payout has more than doubled over the last four years.

Conflict in the Middle East tightened global supply of light oil, a key product for Whitecap. Liquids accounted for 61% of its production but about 93% of its revenue in the quarter, management said on its July 30 earnings call.

In Q2, Whitecap reported funds flow of $1.4 billion, while free funds flow stood at a record $925 million.

Over the first six months of 2026, it generated $1.3 billion in free funds flow and declared $442.7 million in dividends. That’s a payout ratio of about 35%. Put simply, for every $1 of spare cash, roughly $0.35 went to shareholders.

It used the excess cash to lower its debt levels. Net debt in Q2 fell by about $900 million to $2.5 billion. That equals about 0.5 times annualized funds flow, well below management’s 1 times ceiling.

Chief financial officer Thanh Kang explained:

“The dividend, we are comfortable with it. But longer term, we do want to grow our dividend as well,” Kang said.

He added that at oil prices of $65 to $75, management sees room to lift the dividend by 1% to 2% a year over time while still buying back shares. He also expects net debt to be closer to $2 billion by the end of 2026.

The risks every dividend stock investor should weigh

Whitecap’s cash flow is tied to oil and gas prices. If the Middle East supply shock fades and prices drop, free funds flow would narrow. Energy companies have cut dividends in past downturns to protect their balance sheets.

Hedging is another trade-off.

Whitecap locks in prices on part of its output, which smooths cash flow but caps some upside. The strategy cost it $190 million in realized losses in the second quarter.

The share price can also fall. Unlike a GIC, there’s no Canada Deposit Insurance Corporation (CDIC) coverage. So your investment could lose value even as monthly dividends keep arriving.

The Foolish takeaway on this top Canadian dividend stock

Whitecap won’t replace the safety of a GIC. At about 4%, it doesn’t beat the best five-year income rate.

What it offers is different. You get a monthly paycheque, a payout covered nearly three times by free funds flow, a shrinking debt load, and a management team that openly wants to raise the dividend.

Just remember that no single stock should carry your whole income plan. The strongest portfolios are usually built from a basket of quality dividend stocks, chosen with care and held for years.