Canadian energy stocks are a popular choice for income investors because of their strong history of rewarding shareholders. Companies like Enbridge (TSX: ENB) and Suncor (TSX: SU) are known for paying and increasing their dividends. However, their investment cases are shaped by very different business models.
Both companies focus on offering reliable, growing dividends, but the sustainability and growth potential of those payouts depend on different earnings drivers. Enbridge’s business is more closely tied to energy infrastructure and relatively predictable cash flows, while Suncor has greater exposure to commodity prices through its integrated oil operations.
With that backdrop, let’s compare their payouts and assess which company is the better dividend stock to own now.
A person stands in front of several doors representing different U.S. stock options for Canadian investors.
Enbridge to maintain its dividend growth streak
Enbridge is a reliable dividend payer and grower. Its long history of dividend payments, attractive yield of 5.6%, and ability to keep growing its dividend support its investment case.
Enbridge has been paying dividends for more than seven decades. Moreover, it raised its annual payout consistently since 1995. The energy infrastructure company’s dividend is backed by a resilient business model, with almost all EBITDA coming from regulated operations or long-term take-or-pay agreements. This helps reduce the impact of commodity-price swings and supports earnings and distributable cash flow (DCF).
For 2026, Enbridge expects adjusted EPS to increase by 4%–6%. Beyond that, management is targeting roughly 5% annual growth in adjusted EPS and DCF per share, supported by new projects and strength across its core operations. ENB also targets a sustainable DCF payout ratio of 60%–70%.
Looking ahead, Enbridge’s $41 billion secured capital backlog, strong asset utilization, favourable contracting in Gas Transmission assets, higher base rates in Gas Distribution, and expansion of its renewable power portfolio through long-term contracted projects with reliable counterparties augur well for growth.
Overall, with a high yield, predictable cash flows, and solid growth prospects, Enbridge remains a compelling income stock.
Suncor focused on enhancing shareholder value
Suncor’s integrated operations span the entire energy value chain. Its business includes oil sands mining and in situ production, offshore oil production, petroleum refining, marketing, and trading.
Suncor’s portfolio of large, long-life, and high-quality reserves and resources provides a strong foundation for generating sustainable free funds flow and returning capital to shareholders. Its high asset utilization and focus on increasing upstream production, expanding downstream throughput, and reducing its WTI breakeven point position it well to drive earnings and dividend growth.
Suncor is also investing in high-value growth projects while maintaining and improving its existing integrated assets and preserving a strong balance sheet. Suncor expects these initiatives to increase normalized free funds flow by approximately $2 billion by 2028. In addition, the company is targeting a US$5 per barrel reduction in its corporate WTI breakeven, bringing it down to approximately US$38 per barrel by 2028.
With these initiatives, Suncor expects to provide shareholders with a reliable and potentially growing dividend while continuing to return excess capital through share buybacks.
However, despite its focus on enhancing shareholder returns, Suncor remains exposed to commodity-price fluctuations. Therefore, while Suncor’s integrated business model and cost-reduction initiatives provide support for shareholder returns, commodity-price volatility remains an important risk. Suncor stock currently offers a dividend yield of 2.6%.
The bottom line
Enbridge appears to be a better investment right now. Its 5.6% yield is more than double Suncor’s 2.6%, while its regulated and long-term contracted cash flows provide greater visibility into dividend sustainability. Enbridge’s targeted 5% annual growth in DCF per share and 60%–70% payout ratio also leave room for continued dividend growth.
Suncor is also focused on enhancing shareholder value, but its dividend is inherently more sensitive to oil prices.
