Enbridge or Suncor? Here’s the Dividend Stock I’d Rather Own

Enbridge or Suncor? Here’s a look at the two Canadian energy stocks to see which dividend stock offers the better mix of income, stability, and upside.

Key Points
  • Enbridge stands out as a stable dividend option with a 5.42% yield, supported by diversified revenue streams and a 31-year streak of dividend increases.
  • Suncor offers a 2.86% yield but adds value through share buybacks, giving investors potential for capital appreciation alongside dividends.
  • For those seeking dependable dividend income with less price volatility, Enbridge may be the superior choice, whereas Suncor appeals to those open to greater oil price exposure.

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.

Oil industry worker works in oilfield

Source: Getty Images

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.

Fool contributor Demetris Afxentiou has positions in Enbridge. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

More on Dividend Stocks

House models and one with REIT real estate investment trust.
Dividend Stocks

I Think Buying This Stock Is the Easiest Passive Income Play Right Now

With a 5.6% yield, monthly distributions and a high-quality real estate portfolio, this is one of the easiest passive-income stocks…

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

This Stock Down 11% Since July is Giving Strong Buy Vibes

CN’s shares have dipped, but the railway’s operating momentum and outlook have improved.

Read more »

concept of real estate evaluation
Dividend Stocks

A Monthly Passive Income Stock I’d Put My Whole TFSA Contribution Into: Here’s My Take

Putting $7,000 into a TFSA won’t change your life today, but a high-yield monthly payer can start a compounding snowball.

Read more »

man looks worried about something on his phone
Dividend Stocks

Telus Stock: Buy, Sell, or Hold After the Dividend Cut?

Telus just cut its dividend in half, and the real question now is whether the reset finally makes the payout…

Read more »

Investor wonders if it's safe to buy stocks now
Dividend Stocks

Your GIC Is Maturing: Would a Dividend Stock Make More Sense Now?

Canada’s GIC rates are cooling off, so a regulated utility like Emera could offer similar income plus long-term growth potential.

Read more »

The sun sets behind a power source
Dividend Stocks

Power Hungry? 1 Utility Stock That Looks Like a Steal After Dipping 24%

AI could strain power grids for years, and Algonquin is trying to reset as a simpler regulated utility.

Read more »

The RRSP (Canadian Registered Retirement Savings Plan) is a smart way to save and invest for the future
Dividend Stocks

This Canadian Dividend Stock Is Basically a Warm Blanket for Your RRSP

A 3.4% yield might not turn heads, but Fortis has raised its dividend for 52 years and targets 4% to…

Read more »

dividend growth for passive income
Dividend Stocks

2 Dividend Stocks Worth Holding for the Next 7 Years

If you want resilient, growing income from dividends, these are two top TSX stocks that are perfect for income and…

Read more »