I’m a huge fan of shares of pipeline top dog Enbridge (TSX: ENB), especially when shares are flirting with a correction (that’s a 10% drop) while investors fret over analyst downgrades or concerns over a few road bumps facing the Mainline expansion. Of course, it’s never ideal to have growth projects hit a bit of a pause, but at the end of the day, Enbridge remains one of the best dividend growers with a yield well north of the 5% mark in 2026. Did shares get a bit too ahead of themselves at above $80 per share?
Possibly. There was quite a bit baked in before shares slipped around 11% to $71 and change. And while long-term investors will probably do well by getting in here at 27.5 times trailing price-to-earnings (P/E), I am waiting for a more substantial drawdown, perhaps such that the yield returns to the 6% level.
Perhaps the $63-65 level of support could be a key area to watch out for. Whether shares of ENB drop that far as a part of this latest correction, though, remains the big question. Either way, it’s a premier dividend play that’s worth watching closely as we enter one of the more volatile parts of the year.
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Verizon: A 6% yield on the cheap
In the meantime, I think a name like Verizon (NYSE: VZ) is just a bit timelier, especially while the yield is at 6%. Of course, the U.S. telecom scene comes with its own fair share of challenges, but with shares going for 12.5 times trailing P/E, the price of admission, at least in my view, doesn’t seem to bake in much going well. Over the past two years, shares have been very steadily climbing back from a bearish implosion.
With a new wave of smartphones that can run AI on device, I think that the telecoms might be in for more relief going into 2027, especially if the latest wave of personalized AI on-device delivers and helps consumers eat that hefty $300 (or more) price increase at the hands of higher component costs, most notably DRAM (dynamic random access memory) and NAND (storage).
Of course, there’s growing concern that connectivity satellites could make cell towers go the way of the Dodo bird. While there’s no denying the progress made by these profoundly innovative technologies in orbit, I think it’s just a bit of a stretch to think that legacy telecom, which includes Verizon, will face disrupted cash flows going into the year’s end.
In many ways, Verizon has become more of a cost-cutting story. And while Enbridge might be more insulated from disruptive threats (moving energy from point A to point B won’t change drastically in the coming years), I do find that there’s deeper value, more yield, and more to look forward to in the second half.
U.S. dividend payers fit better in an RRSP
Of course, as a U.S. dividend payer, Canadians would get more mileage by stashing the name at the core of a Registered Retirement Savings Plan (RRSP). The 15% U.S. dividend withholding tax is too great for a 6% yielder, as it amounts to 0.9% of lost yield. For RRSP investors seeking more value and yield for their dollar, Verizon, I think, is worth a closer look as the firm looks to steady the ship after some rough sailing in recent years.
If you aren’t looking to buy for an RRSP, perhaps Enbridge stock is a better bet despite the heftier premium and newfound negative momentum.
