There’s no shortage of great options for investors looking for the next dividend stock to buy. The energy sector, in particular, provides several examples for investors to consider.
Two of the well-known income-producing options from the energy sector are Enbridge (TSX:ENB) and Suncor Energy (TSX:SU).
Both can offer a growing income backed by different business models. But which one is the better dividend stock for investors to own?
Let’s take a look at both.
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The case for Enbridge
Enbridge is one of the largest energy infrastructure stocks in Canada. The company operates pipelines, energy storage facilities, a natural gas utility, and a growing renewable energy portfolio.
This gives Enbridge several diversified businesses that generate recurring revenue backed by long-term contracts and regulated frameworks.
More importantly, it gives Enbridge a recurring cash flow that is generally less dependent on the day-to-day movement of oil and gas prices. That means the company can predictably invest in growth initiatives from its multi-billion-dollar backlog and pay a handsome quarterly dividend.
As of the time of writing, that dividend carries a yield of 5.42%. This makes the stock one of the higher-paying income options in Canada.
Prospective investors should also note that Enbridge has provided investors with annual bumps to that dividend for 31 consecutive years without fail. The most recent increase was a 3% bump for 2026.
The case for Suncor
Suncor offers a different setup. The company is an integrated energy producer with oil sands operations as well as refining and downstream businesses. That gives investors more direct exposure to energy prices, but its refining operations can also help offset some of the volatility that comes from oil production.
Suncor’s vertical integration is often overlooked by investors, but it’s one of the company’s biggest advantages. On one hand, it gives investors direct exposure to energy prices. On the other, it can also help offset some of the volatility that comes from oil production.
Turning to income, Suncor offers a respectable but lower yield than Enbridge. As of the time of writing, Suncor offers a 2.86% yield. The company has also paid dividends for over a decade, but Suncor’s dividend-growth streak runs back only five years.
That being said, Suncor does reward its shareholders in other ways. Suncor routinely repurchases its shares. In fact, beginning this month, the company plans to increase its monthly share repurchases to $500 million.
This shows how Suncor can be more than a sub-3% dividend stock. Investors get to benefit from the aggressive buybacks and the potential for greater upside when energy markets are favourable.
The better dividend stock is…
While both Enbridge and Suncor are attractive options for investors, for me, Enbridge is the better dividend stock to own.
Suncor’s combination of dividends and share repurchases gives investors several ways to benefit from strong cash generation. If oil prices remain favourable, it could also deliver stronger capital appreciation.
This makes Suncor more appealing to investors who are willing to accept a lower starting yield in exchange for greater exposure to oil prices.
But if I’m looking for dependable dividend income that I can let compound for decades, I would lean more toward Enbridge. Apart from offering a yield that’s nearly double what Suncor offers, Enbridge’s infrastructure-heavy business provides more predictable cash flows and less commodity-price volatility.
