Dividend Investors: Top Canadian Energy Stocks for December

These energy companies have increased their dividends for over 20 years and offer compelling yield near the current market price.

| More on:
oil and natural gas

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Dividend investors could consider adding the top Canadian energy stocks for regular passive income. These companies are renowned for their solid dividend payments and growth history, making them reliable investments that generate steady income in all market conditions.

With this background, here are the top energy stocks for December.

Energy stock #1

Enbridge (TSX:ENB) is a no-brainer dividend stock in the energy sector to buy in December. This energy infrastructure company has been uninterruptedly paying dividends for seven decades. Moreover, it has consistently increased its distribution for 30 consecutive years. Including the recent dividend growth announced earlier this month, Enbridge pays a quarterly dividend of $0.943 per share, reflecting a compelling yield of more than 6%.

The company’s extensive liquids pipeline network, high system utilization, power-purchase agreements, and regulated tolling frameworks position it well to consistently expand its earnings and distributable cash flow (DCF) in all market conditions. This will support higher dividend payouts in the coming years.

Created with Highcharts 11.4.3Enbridge PriceZoom1M3M6MYTD1Y5Y10YALL8 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025203040506070www.fool.ca

The company invests in conventional and renewable assets to capitalize on energy demand. Moreover, its focus on strategic acquisitions to enhance low-risk earnings base augurs well for future distributions.

The energy giant projects mid-single-digit growth in its bottom line and DCF per share in the long term. This will help Enbridge increase its dividends at a similar pace in the long term. The firm also has a payout ratio of 60-70% of its DCF, which suggests that its dividends are well-covered and sustainable in the long term.

Energy stock #2

Dividend investors looking for top Canadian energy stocks for December could also consider Canadian Natural Resources (TSX:CNQ). This pure-play oil and gas company is famous for its stellar dividend payment history and ability to grow its quarterly dividends at a solid pace.

The Canadian energy company has increased its dividend for 25 consecutive years, reflecting a compound annual growth rate (CAGR) of 21%. This high dividend-growth rate reflects the company’s ability to grow its cash flows at a solid pace and commitment to rewarding its shareholders with higher distributions.

Created with Highcharts 11.4.3Canadian Natural Resources PriceZoom1M3M6MYTD1Y5Y10YALL8 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520212021202220222023202320242024202520250102030405060www.fool.ca

Canadian Natural Resources is well-positioned to maintain this dividend growth trend. Its long-life, low-decline assets, solid balance sheet, and operating efficiency will drive its earnings and cash flows, supporting higher payouts. Moreover, its well-balanced production, strategic acquisitions, and focus on low-capital, high-growth projects augur well for future cash flows.

Canadian Natural Resources’s ability to generate sustainable free cash flow will support future payouts. It currently pays a quarterly dividend of $0.563 per share, reflecting a yield of 4.9%.

Energy stock #3

Besides Enbridge and Canadian Natural Resources, investors could consider TC Energy (TSX:TRP) stock in the energy sector for its dependable dividend payouts. This energy infrastructure company has consistently grown its dividend since 2000, and its dividends have grown at a CAGR of about 7% during the same period.

Created with Highcharts 11.4.3Tc Energy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

TC Energy’s highly contracted and regulated asset base enables it to generate solid earnings and cash flow, supporting higher dividend payments.

The energy giant’s earnings and cash flows will likely benefit from a high asset utilization rate, secured capital projects, and a focus on productivity savings and debt reduction. This will enable TC Energy to boost its shareholder value through higher payouts. In the long term, it projects a 3-5% annual increase in its dividends and offers an attractive yield of 5.8%.

Should you invest $1,000 in Enbridge right now?

Before you buy stock in Enbridge, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Enbridge wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Enbridge. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Energy Stocks

Investor wonders if it's safe to buy stocks now
Energy Stocks

Billionaires Might Sell U.S. Stocks and Buy This Canadian Stock to Avoid Tariff Risks

Billionaires might be worried about the future of U.S. stocks with the markets the way they are, and looking for…

Read more »

Offshore wind turbine farm at sunset
Energy Stocks

Got $500? Where I’d Invest it in This Green Energy Stock for Long-Term Sustainable Returns

This green energy company’s growing scale and focus on rewarding investors make it a top bet for investors looking for…

Read more »

golden sunset in crude oil refinery with pipeline system
Energy Stocks

TC Energy: Buy, Sell, or Hold in 2025?

TC Energy is up 30% in the past year. Are more gains on the way?

Read more »

golden sunset in crude oil refinery with pipeline system
Energy Stocks

Is Enbridge Stock (TSX:ENB) a Buy for its 5.9% Dividend Yield?

This solid dividend payer has the potential to help investors generate reliable passive income for decades.

Read more »

nugget gold
Dividend Stocks

Recession Stocks Are Back: Consider Buying the Dip This April

Recession stocks are back, and this one could be a solid winner.

Read more »

Person holds banknotes of Canadian dollars
Energy Stocks

Best Stock to Buy Right Now: Suncor vs Cenovus?

Suncor stock's 4.2% dividend yield vs Cenovus Energy's growth potential: Tariff-proof safety or growth gamble?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Earn $500/Month in Tax-Free Income With Your TFSA

Canadians can earn $500 or a desired tax-free income every month by saving and investing through the TFSA.

Read more »

how to save money
Energy Stocks

1 Canadian Stock Ready to Surge in 2025 and Beyond

This Canadian stock has seen significant growth, but more could come for 2025 and beyond.

Read more »