When you’re investing in stocks to generate dependable passive income, it’s not always easy when a company suddenly changes the tone around its dividend. That is exactly what Telus (TSX:T) did recently. In the first week of December, the telecom giant said it will pause dividend growth while keeping the payout at the current level as it focuses on deleveraging and improving free cash flow.
While Telus also outlined a multi-year plan for at least 10% annual free cash flow growth, its decision to slow dividend growth still felt uncomfortable for income-focused investors who rely on rising payouts. That shift forced many Foolish investors to ask whether there are better options offering both yield and visibility today.
And in my opinion, Pembina Pipeline (TSX:PPL) looks steadier and more appealing for long-term dividend investors today due mainly to its long-term contracts, predictable cash flow, and a dividend that remains well supported by operations. In this article, I’ll talk about why Pembina could be an amazing Canadian dividend stock to buy over Telus right now.
Why Pembina stock looks more dependable today
If you don’t know it already, Pembina Pipeline operates one of the largest energy transportation and midstream networks in Canada, moving crude oil, natural gas, and natural gas liquids through pipelines, processing facilities, and export infrastructure.
PPL stock is currently trading at $50.91 per share and has a market cap of about $29.6 billion. Pembina pays a quarterly dividend and offers an annualized dividend yield of roughly 5.6%, which continues to appeal to most income-focused investors. More importantly, its contract-based infrastructure business tends to hold up better even when markets feel uncertain.
Cash flow backed by long-term contracts
In the third quarter of 2025, Pembina posted adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $1.03 billion. That marked a small year-over-year increase due to higher contracted volumes and inflation-linked toll adjustments on its key systems, such as the Peace Pipeline. Its pipelines segment continued to benefit from stronger demand and improved utilization.
Meanwhile, the energy infrastructure giant’s facilities also contributed positively as natural gas processing volumes increased, especially in the Duvernay region. More importantly, Pembina’s adjusted cash flow from operating activities in the latest quarter came in at $648 million, which comfortably covered its dividend payments.
This type of cash flow profile is important for anyone looking for a top Canadian dividend stock, especially when dividend growth for many other companies is being paused.
Long-term projects add dividend income visibility
My confidence in Pembina’s dividend sustainability also comes from its long runway of contracted growth projects. Interestingly, the company is advancing more than $1 billion worth of pipeline expansions designed to support rising production across the Montney, Duvernay, and Deep Basin regions. Many of these projects are backed by long-term take-or-pay agreements, which allow it to lock in revenue regardless of short-term commodity price swings.
In addition, Pembina is moving forward with Cedar LNG (liquefied natural gas), a large export project that recently secured a 20-year agreement with PETRONAS for most of its capacity. That deal is expected to provide Pembina Pipeline with stable, long-duration cash flow once the project enters service later this decade.
Foolish takeaway
For dividend investors comparing available options on the TSX today, Pembina offers a great combination of attractive yield, cash flow visibility, and contract-backed growth that currently feels more reassuring than Telus. That balance of fundamentals is exactly why Pembina looks way more stable as a top Canadian dividend stock than most others right now.
