Enbridge vs. Telus: The Better Dividend Stock to Own Through 2026

Enbridge and Telus both yield above 5%, but recent dividend changes make one look like the better dividend stock to own through 2026.

Key Points
  • Enbridge is a stable dividend stock with a 5.4% yield, supported by long-term contracts and a history of over seven decades of dividend payments, including 31 years of consecutive annual increases.
  • Telus offers a still-high yield of 5.66% following a recent dividend reset; this reset positions the company better financially amidst the pressures of increased interest rates.
  • Despite Telus’ stronger position post-reset, Enbridge’s consistent dividend record makes it a preferable choice for income investors through 2026 and beyond.

There’s no shortage of great dividend stocks for investors to consider right now. Two of the most sought-after income producers are Enbridge (TSX: ENB) and Telus (TSX: T). But which of these two is the better dividend stock for investors?

Let’s take a look at what each one can offer right now.

diversification is an important part of building a stable portfolio

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Enbridge offers dependable income

There are few income picks on the market that are as recognizable to investors as Enbridge. The company is one of the largest energy infrastructure picks on the market. Enbridge operates multiple businesses that include a sprawling crude and natural gas pipeline network, storage facilities, and a growing renewable energy operation.

A large portion of those businesses operate under long-term contracts or regulated frameworks. This means that Enbridge can generate a reliable and recurring revenue stream that lets it predictably invest in growth initiatives and pay a quarterly dividend.

On the growth side, Enbridge has a large multi-billion-dollar backlog across its core business. As those initiatives become operational, they add to Enbridge’s already impressive cash flow.

Turning to dividends, the quarterly dividend is what continues to draw investors to Enbridge. The company has paid dividends for over seven decades and has given investors annual increases for 31 consecutive years. This makes Enbridge one of the better-paying options to consider.

As of the time of writing, Enbridge offers a yield of 5.4%.

Telus offers a decent yield after its reset

Telus is one of Canada’s big telecom stocks. The company offers subscription-based services to customers across the country. That includes wireless, wireline, internet, and TV services. In recent years, some of those services have become more defensive in nature, adding to an already impressive moat.

Back in July of this year, Telus announced a reset to its quarterly dividend. That reset took the form of a 55% cut, which followed Telus’s previously announced pause in dividend growth. The company is now targeting payouts between 45% and 60% of trailing 12-month free cash flow.

At $0.1875 per quarter, that works out to an annualized $0.75 per share.

Part of the reason for that cut could be traced back to the impact of the increased interest rates we saw in recent years. Telecoms are capital-intensive businesses that rely on borrowing to fund massive infrastructure and growth projects.

When interest rates rose, the cost of carrying those funds increased, which put pressure on the balance sheet. And as investors rotated to other investments, the stock price dipped, sending the yield in the opposite direction.

Prior to the reduction, Telus’ dividend yield was north of 11%.

For existing income investors, that cut was painful. That being said, the reset left the company in a stronger financial position going forward.

Prospective investors should also note that now that interest rates have stabilized and Telus’s cash flow has improved, the stock remains at lower levels. This could be a long-term opportunity for investors looking for a dividend stock that trades at a discount.

Which is the better dividend stock to own through 2026?

Both Telus and Enbridge offer income investors opportunities. But for me, Enbridge is the better dividend stock to own through 2026.

The difference in yield between the two stocks is small. A $10,000 investment generating Enbridge’s 5.4% would produce $540 annually, compared with Telus’s $566 at a 5.66% yield.

That extra $26 isn’t enough to outweigh Enbridge’s stronger dividend record.

Telus may have a safer dividend because of its recent payout reset, but Enbridge didn’t need a reset and has consistently raised its payout for over three decades.

Through the rest of 2026, Telus still needs to show that its lower payout translates into stronger cash flow and make progress on reducing its debt.

That makes Enbridge my pick as the better dividend stock to own through the rest of 2026 and into the future.

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

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