3 Ultra-High-Yield Energy Dividend Stocks to Buy and Hold for 2026

Written by Jitendra Parashar at The Motley Fool Canada

Energy stocks aren’t always the first place investors look for reliable long-term income, but they actually can generate some of the strongest cash flows in the market. And when those cash flows are paired with disciplined management teams and shareholder-friendly dividend policies, they could become even more powerful wealth-building investments over time.

That’s especially true right now, as many energy companies continue to benefit from stronger operational efficiency, improved production, and surging oil prices. For income-focused investors, this creates an opportunity to lock in attractive yields while also gaining exposure to potential long-term capital appreciation. In this article, I’ll highlight three ultra-high-yield Canadian energy stocks that could be worth buying and holding through 2026 and beyond.

Freehold Royalties stock

Freehold Royalties (TSX:FRU) stands out as one of the most attractive royalty businesses in the Canadian energy sector. The company manages a large portfolio of oil and natural gas royalties across Canada and the United States, providing diversified exposure without directly bearing the operational risks associated with drilling activities.

FRU stock currently trades at $17.90 per share with a market cap of about $2.9 billion. Over the last year, the stock has surged more than 60%, reflecting strong operational momentum. It also offers a monthly dividend yield of 6% at this market price.

In 2025, Freehold posted revenue of $313 million and funds from operations (FFO) of $235 million, up 2% year over year (YoY). For the year, the company’s production jumped 9% YoY to a record of 16,294 barrels of oil equivalent per day (boe/d).

The company has also benefited from stronger U.S. natural gas pricing, which significantly improved cash flow generation. In 2026, Freehold expects its production to remain between an average of 15,500 and 16,300 boe/d, backed by its current inventory of drilling licences, permits, and drilled and uncompleted wells.

Moreover, the energy firm continues investing in land acquisitions, which could support its future production growth and dividend stability.

Parex Resources stock

Parex Resources (TSX:PXT) has also emerged as a strong energy stock for long-term income investors. The Calgary-based firm mainly focuses on conventional oil and gas production in Colombia and has delivered exceptional stock performance over the last year. PXT stock recently closed at $28.30 per share with a market cap of about $2.7 billion. Over the last 12 months, its shares have skyrocketed more than 160%. Also, the company currently offers a quarterly dividend yield of 5.5%.