Don’t get me wrong. When it comes to strong long-term dividend stocks, Enbridge (TSX:ENB) belongs at the top of that list. This oil and gas pipeline powerhouse has offered massive growth over the last few years, yet there are others that could provide more growth for those worried that ENB may have stalled.
Today, let’s look at why I like TC Energy (TSX:TRP) and Brookfield Renewable Partners (TSX:BEP.UN) a bit better than ENB on the TSX today.
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What happened?
First, let’s compare earnings. ENB is just off record results, with earnings before interest, taxes, depreciation, and amortization (EBITDA) at $4.6 billion. It reaffirmed its 2025 guidance and longer-term outlook as well, and closed strategic investments.
However, the second quarter was great for TRP and BEP as well. TRP reported rising EBITDA and raised its outlook as well. Furthermore, there were a slew of products placed into service, with $4.5 billion in new projects over the last nine months. BEP was also strong, reporting record funds from operations (FFO) at US$371 million, and signed major commercial contracts, deploying $2.6 billion in capital.
Growth drivers
So, with all the earnings coming in strong, we need to look at what’s driving long-term growth. For ENB, it does have a large backlog of $32 billion, diversified across liquids, gas, distribution, and now renewables. Yet growth guidance is lower, though it remains a highly diversified company able to fund further projects.
Yet for TRP and BEP, growth looks clearer. BEP in particular has seen large developmental and contracted pipeline growth for renewables, corporate offtake contracts with Alphabet (Google) and Microsoft, and even nuclear services. Management now targets double-digit FFO growth. Meanwhile, TRP’s natural gas infrastructure supports growth from LNG exports, data centres, and industrial demand. Many are low-risk options, allowing growth at a reasonable price.
Considerations
Now, let’s add in the final layer of risks and rewards for these dividend energy stocks. ENB offers a 5.4% yield, with TRP at 4.5% and BEP at 5.8%. Therefore, all three offer a solid yield. Yet TRP and BEP have offered higher growth guidance, with ENB at just 3%. Furthermore, TRP and BEP look more valuable, with ENB trading at 21.8 times earnings, TRP at 19.9, and BEP at just 10.6!
ENB just doesn’t have the upside of the other two. There’s a lower growth ceiling compared to the others, especially when considering the exposure to fossil fuels. Meanwhile, TRP has a huge growth runway with long-term contracts, and BEP has secular demand for clean energy with major signed contracts.
Bottom line
If you’re looking for strong long-term potential, BEP offers the highest with a solid dividend yield, and TRP is a close second with its growth through contracted pipelines. ENB, however, is slowing down. There’s simply less upside, but the most predictable cash flow. In the end, it all means that no matter what energy stock you pick, these companies offer massive dividends, though some offer more upside than others.
