Enbridge (TSX:ENB) and Suncor Energy (TSX:SU) are two Canadian energy titans that I think ought to be bought together, if not for the cheap dividends, for their solid dividend growth profiles and track record of returning capital right back in the pockets of their long-term investors.
Of course, for the income crowd, shares of ENB take the cake as being the better bet, regardless of the stock chart and the price of admission. Even after substantial capital appreciation in the past three years, the stock still has a seriously impressive 5.4% dividend yield.
That’s harder to come by in mid-2026. Of course, Enbridge has been dealt some downgrades of late, and the valuation is on the higher end of the historical range. But, at the same time, if you want low beta and utility-like cash flow generation, it’s tough to look past the midstream energy heavyweight, even if it gives off the perception that it’s getting a bit pricey.
A person stands in front of several doors representing different U.S. stock options for Canadian investors.
Suncor looks far cheaper, but it’s been so incredibly turbulent of late
Meanwhile, shares of Suncor Energy offer immense value at just 11.1 times trailing price-to-earnings (P/E), especially after correcting by around 11% in response to the sudden drop in the price of oil.
Indeed, oil prices can be quite choppy and unpredictable. And as an integrated titan, Suncor is going to move based on commodity price fluctuations. For those who don’t have an appetite for choppiness, perhaps the likes of an Enbridge could be better, especially with the added dividend to cushion things in any given year.
Despite the recent turbulence, Suncor stock has the lower beta (0.57 versus 0.79 for Enbridge). Not because it’s a smooth ride. Far from it, actually, with shares correcting on three (nearly four) separate occasions in just the past six months. That’s some major volatility that’s lowly correlated to the broad TSX Index, which has been on a smooth ride higher, at least for the most part. Either way, Suncor stock’s lower degree of correlation seems like it’s not a good thing when the TSX Index looks virtually unstoppable as the bull market moves onward.
The case for Enbridge
While I’m a fan of both companies, I do find that Enbridge is the better bet in spite of the dirt-cheap price of admission in Suncor. The midstream is just a steadier place to be in a climate where oil could spike or collapse based on one news event.
While Enbridge’s projects might hit delays or strategic pauses, I do think that its expansion runway is quite clear and far less dependent on which direction the price of oil goes over the near- to medium-term. That’s not to discount the serious progress going on at Suncor. It is arguably the best version of itself after years of changes made behind the scenes. The balance sheet is in better shape and operations are going smoothly.
And while Suncor might have a higher appreciation ceiling, Enbridge strikes me as the more bountiful bet with its fat yield and incredibly shareholder-friendly management team. If the yields eclipse 6% again, I’m sure many income investors will be willing to swoop in, even if negative momentum scares some into profit-taking.
If you want a cheap integrated energy juggernaut, there’s nothing wrong with going for Suncor. But, in my view, Enbridge’s stellar, fast-growing dividend is worth paying a premium for.
