Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Best Dividend Stocks In Canada: Enbridge or Suncor?

Published 2021-04-22, 09:49 a/m
Updated 2021-04-22, 10:15 a/m
Best Dividend Stocks In Canada: Enbridge or Suncor?

Best Dividend Stocks In Canada: Enbridge or Suncor?

Two of the most popular stocks in Canada are Suncor Energy Inc (TSX:SU)(NYSE:SU) and Enbridge Inc (TSX:ENB)(NYSE:ENB). This makes sense, as these are some of the biggest and best companies in Canada. Because these stocks are so big, they naturally pay dividends. So which of these is the best dividend stock in Canada?

When looking at dividend stocks, there are different qualities to look for. Some investors may be concerned about the dividend first and foremost. So it’s important for high yields and safe and resilient cash flows to underpin the dividend.

Other investors may want stocks that pay dividends but are still looking for companies that can grow their operations and shareholder value as well.

It all depends on what you’re looking for out of dividend stock to decide which Canadian stocks are the best ones for your portfolio. Once you know what you’re looking for, you can decide whether Enbridge or Suncor is the better buy.

A tonne of recovery potential Suncor stock continues to offer investors incredible value, making it a top buy today. It’s a popular stock because it’s one of the biggest and best dividend stocks in the Canadian energy industry.

Unlike Enbridge stock, its dividend isn’t as safe and resilient. However, it offers a lot more potential to grow, especially today as the energy stocks continue to recover from the effects of the pandemic.

What’s really attractive about Suncor, though, is that although it’s not as robust as a stock like Enbridge, it still has resilient operations due to its impressive vertical integration.

So although it had to trim its dividend during the pandemic, it never had to suspend it altogether. Today the dividend yields 3.3%.

The combination of growth and resiliency, plus its dividend, makes it one of the best energy stocks in Canada. Of the nine analysts that cover Suncor, eight have a buy rating. Plus, its average target price is $34.50.

So when you consider that recovery potential and the 3.3% dividend, Suncor is one of the best dividend stocks in Canada today.

One of the best dividend stocks in Canada Between the two, Suncor is the better growth stock today. However, Enbridge is not just the better dividend stock between the two. It’s one of the best dividend stocks in Canada.

Enbridge is a company that’s at the heart of the North American economy. The company transports roughly a quarter of all the oil in North America and 20% of all gas consumed in the United States. This makes Enbridge extremely important, which is why it’s such a reliable business.

It will never be completely unaffected by the energy industry. However, Enbridge has done such a great job diversifying its operations that it can weather downturns, especially in the energy industry, exceptionally well.

So while other companies, including Suncor stock, were trimming or suspending their dividends through the pandemic, Enbridge increased its dividend.

The dividend aristocrat has posted 26 years of consecutive dividend increases. That goes to show why Enbridge is easily one of the best dividend stocks in Canada.

Bottom line Because the oil industry is still recovering and Suncor stock trades down more than 35% from its $40 pre-pandemic price, Suncor may have more upside in the immediate future.

That doesn’t mean Enbridge isn’t worth an investment either, though. The stock is also fairly undervalued, and also offers an incredibly safe dividend that grows each year and yields more than 7.1% today.

So both stocks offer some of the best value in Canada, which is the best dividend stock for you, though, all depends on what it is you’re looking for.

The post Best Dividend Stocks In Canada: Enbridge or Suncor? appeared first on The Motley Fool Canada.

Fool contributor Daniel Da Costa owns shares of ENBRIDGE INC. The Motley Fool owns shares of and recommends Enbridge.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2021

This Article Was First Published on The Motley Fool

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.