Enbridge Is Great, But I Think This Stock Could Be a Better Buy

Enbridge’s 5%+ yield looks comforting, but Canadian Natural may offer the better long-term total return if growth matters more than stability.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published August 12, 7:00 pm EDT

| More on: CNQENB

Key Points

Enbridge is a steadier pipeline toll collector with a bigger current yield, but growth is slower and debt is higher.
Canadian Natural is a producer with more commodity volatility, yet it’s growing production and dividends faster at a cheaper valuation.
Choose Enbridge for dependable income, or Canadian Natural for higher upside and dividend growth through a full cycle.

A generous dividend can make an investment feel as though half the work has already been done. Collect the payment, reinvest it, and let compounding take over while you enjoy the rare financial pleasure of being paid to wait. Still, the biggest yield isn’t automatically the biggest opportunity.

Oil industry worker works in oilfield — Source: Getty Images

Think long term

A stock’s long-term return comes from both income and growth. A 5% yield paired with sluggish cash-flow growth may trail a 4% yield backed by rising production, dividend increases, and share repurchases. Investors therefore need to look beyond today’s payment and ask how much larger the business could become.

The answer also depends on how the company makes money. Pipeline operators generally collect contracted tolls for moving energy, creating steadier cash flow with less exposure to commodity prices. Producers sell the oil and gas itself, making their profits more volatile but giving shareholders considerably more upside when prices and production climb together.

Enbridge (TSX: ENB) sits firmly in the first camp. It operates liquids pipelines, natural gas pipelines, utilities, storage, and renewable power assets across North America. Its vast network would be spectacularly difficult to reproduce, unless someone happens to have several decades, billions of dollars, and an unusually patient group of regulators.

Why Enbridge remains great

At roughly $73 per share, Enbridge stock offers a dividend yield near 5.4%. Its annualized $3.88 dividend represents approximately 66% of the midpoint of management’s 2026 distributable cash flow guidance, comfortably inside its target range. A $41 billion secured project backlog should also help the company pursue roughly 5% annual growth in cash flow and earnings after 2026.

That combination makes Enbridge stock an excellent choice for investors prioritizing dependable income. Yet its debt-to- earnings before interest, taxes, depreciation and amortization (EBITDA) ratio recently stood at 5.1, while management’s expected growth rate remains respectable rather than thrilling. Investors building a diversified collection of Canadian dividend stocks may therefore want more growth from their next energy purchase, which points toward Canadian Natural Resources (TSX: CNQ).

Why CNQ could be better

CNQ produces crude oil, synthetic crude, bitumen, natural gas, and natural gas liquids. Unlike Enbridge stock, it feels commodity-price swings directly. Fortunately, its enormous, long-life oil sands assets have relatively low decline rates, reducing how much money must be spent simply replacing yesterday’s production.

The latest quarter showed why that difference can be powerful. CNQ delivered record production of approximately 1.7 million barrels of oil equivalent per day (boe/d), an 18% year-over-year increase. Management raised its 2026 production outlook for the second time this year after strong drilling results and a strategic acquisition, giving investors growth beyond simply hoping oil prices remain elevated.

CNQ stock also increased its quarterly dividend by 6.4% earlier this year, marking its 26th consecutive year of dividend growth. The stock yields roughly 4% near $63.50 and trades around 11 times forward earnings. Investors receive less income today than with Enbridge stock, but potentially faster income growth, expanding production, and additional upside from share repurchases. That’s an appealing mix when choosing among Canadian energy stocks.

Bottom line

CNQ’s advantage comes with considerably more volatility. Falling oil prices could reduce cash flow, slow buybacks, and knock the share price around. Several larger expansion projects also remain paused while the company waits for regulatory, fiscal, and pipeline clarity.

Enbridge stock remains the stronger choice for investors who want the larger starting yield and steadier cash flow. For those who can tolerate energy-market swings and hold through a full commodity cycle, however, CNQ stock’s faster dividend growth, rising production, and lower valuation could produce the better total return. Sometimes collecting a little less income today leaves considerably more room for tomorrow.