What would you do with $10,000 if your goal were to generate reliable dividend income? You’d keep an eye on both Enbridge (TSX: ENB) and Telus (TSX: T) stocks for their high yields. Both these Canadian companies have been favourites among investors seeking reliable dividend income. However, their dividend outlooks have recently taken very different paths.
Enbridge has continued to reward shareholders with rising distributions, strengthening its appeal to income investors. Telus, meanwhile, has taken a very different approach, slashing its dividend by 55% as it focuses on paying down debt to strengthen its balance sheet.
That dividend cut is more than just a smaller cheque for shareholders. It fundamentally changes Telus’s investment story. The company is moving away from being primarily a dividend-growth play and is instead prioritizing a more sustainable payout and greater financial flexibility.
So, if I had $10,000 ready to invest today, which of these two Canadian dividend stocks would I choose? Let’s compare their dividends, financial positions, and growth prospects.
A person stands in front of several doors representing different U.S. stock options for Canadian investors.
Enbridge has room to keep growing its dividend
Enbridge is one of the most reliable dividend stocks. The company has been paying dividends for more than 70 years and has increased its annual payout every year since 1995. Its solid distributions reflect the strength and stability of Enbridge’s underlying businesses.
Enbridge’s diversified revenue base positions it well to keep paying and growing its dividend in the years ahead. Its portfolio spans liquids pipelines, natural gas infrastructure, gas utilities, and renewable power. Much of its cash flow comes from regulated businesses and long-term take-or-pay contracts, while its pipeline assets operate at high utilization rates. Its highly contracted, regulated operations reduce exposure to commodity-price volatility and support relatively predictable distributable cash flow (DCF).
Enbridge also maintains a sustainable payout ratio of 60% to 70% of DCF. This leaves room to increase shareholder distributions while funding growth projects.
With strong performance from its core businesses and a secured capital backlog of approximately $41 billion, Enbridge has a solid foundation for expanding its DCF and earnings per share at a mid-single-digit rate over the medium term. As cash generation and earnings continue to grow, ENB is well positioned to continue growing its dividend.
Telus strengthens its financial position
Unlike Enbridge, Telus is focused more on a conservative approach to capital allocation, placing greater emphasis on debt reduction. It has lowered its dividend payout target to 45%–60% from 60%–75%, providing greater financial flexibility and a stronger buffer against market volatility.
The dividend cut is expected to save the company about $2.7 billion through 2028, which Telus will use to reduce debt. Telus plans to bring its net debt-to-adjusted EBITDA ratio down to around 3 times or lower by 2028, compared with 3.5 times in the second quarter of 2026.
Telus is also focused on divesting non-core assets to generate liquidity and further strengthen its balance sheet. At the same time, customer growth, high retention rates, and ongoing cost-saving initiatives could support earnings. The company is concentrating its investments on areas with strong long-term growth potential, including wireless, PureFibre, and digital and AI infrastructure.
Overall, lower capital spending, disciplined investment, and a reduced dividend payout ratio should strengthen Telus’s financial resilience, improve its capacity to reduce leverage, and better support the sustainability of its dividend.
Where to invest $10,000
Both Enbridge and Telus offer attractive dividend yields, but they now represent very different investment propositions. If I had $10,000 to invest today, I would put it into Enbridge. Its long history of dividend growth, predictable cash flows, a sustainable payout ratio, and solid growth opportunities make it a more reliable dividend stock.
Telus’s turnaround could ultimately reward shareholders, but Enbridge stock appears more compelling.
