All oil and gas pipeline stocks have been in a downtrend in October since the US government shutdown. Share prices of Enbridge (TSX:ENB), TC Pipeline, and Pembina Pipeline dipped 6–10% since October 3, creating an opportunity to buy the dip and lock in a higher dividend yield. For a long time, Enbridge has been a dividend darling of risk-averse investors seeking a passive income source. It has even grown its dividends at a compounded annual growth rate of 9% in the last 20 years.
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Should you forget Enbridge stock?
Has Enbridge lived its phase of fast growth? Let’s see.
The company has the advantage of owing the largest pipeline infrastructure, which plays a key role in transmitting Canadian oil and gas to the United States. Over the years, the pipelines have paid off, generating higher free cash flow, which has helped Enbridge grow its dividends. In the post-pandemic world, the company accelerated its capital spending on natural gas pipelines, which slowed its free cash flow growth and, hence, dividend growth.
| Year | ENB Dividend per Share | Growth |
| 2025 | $3.77 | 3.0% |
| 2024 | $3.66 | 3.1% |
| 2023 | $3.55 | 3.2% |
| 2022 | $3.44 | 3.1% |
| 2021 | $3.34 | 3.0% |
| 2020 | $3.24 | 9.8% |
| 2019 | $2.95 | 10.0% |
| 2018 | $2.68 | 11.2% |
| 2017 | $2.41 | 13.8% |
| 2016 | $2.12 | 14.0% |
| 2015 | $1.86 | 32.9% |
Canada is now exploring opportunities to sell its oil and gas to other nations and diversify its trade partners. Pipelines will continue to be an integral dividend generator, but the growth may remain slow for the next few years until some of the gas pipelines are paid off. Enbridge expects to grow its dividend by 5% from 2027 onwards.
A 5.7% dividend yield and a 3–5% dividend growth without the dividend reinvestment plan (DRIP) option make the evergreen Enbridge less attractive.
The TSX has other magnificent dividend stocks that are bucking the current trend and attracting the interest of investors from the US, Europe, and Asia.
Buy This Magnificent Dividend Stock Instead of Enbridge
The energy sector is seeing significant demand for natural gas as rapid expansion of artificial intelligence (AI)-driven data centres and a wave of industrial reshoring is stressing power grids. The renewable energy expansion is failing to keep pace with the AI-induced electricity demand. This is where natural gas provides a key stopgap solution.
Tourmaline Oil (TSX:TOU) emerged as a key beneficiary of the natural gas trend. It is Canada’s largest natural gas producer by volume and has the advantage of low development costs. The stock has jumped 595% from its pandemic low in March 2020.
Sanctions on Russian oil and gas after the 2022 Russia-Ukraine war helped boost oil and natural gas prices, opening a liquid natural gas (LNG) export opportunity for Canada.
Canadian Prime Minister Mark Carney will fast-track approval of an LNG plant in British Columbia and the upgrade of the Port of Montreal to boost LNG exports beyond the United States. Add to it the AI-driven natural gas demand. Tourmaline Oil is in a cyclical uptrend, sharing its windfall gains with shareholders by growing dividends and giving special dividends.
| Year | TOU Regular Dividend | TOU Special Dividend | Total Dividend |
| 2025 | $2.00 | $1.05 | $3.05 |
| 2024 | $1.32 | $2.00 | $3.32 |
| 2023 | $1.05 | $5.50 | $6.55 |
| 2022 | $0.90 | $7.00 | $7.90 |
| 2021 | $0.67 | $0.75 | $1.42 |
| 2020 | $0.50 | $0.50 | |
| 2019 | $0.46 | $0.46 | |
| 2018 | $0.37 | $0.37 |
The regular dividend growth is a result of increasing natural gas production, and the special dividend is the gain realized from higher natural gas prices. This cyclical upturn will likely continue for the next four to five years, making it a dividend stock to buy and hold for the medium term.
