2 Canadian Dividend Giants Worth Buying While Rates Stay Put

The recent announcement of a two-week ceasefire among the United States, Israel, and Iran has provided a welcome pause in hostilities, reopening the Strait of Hormuz and offering much-needed relief to global equity markets. However, uncertainty persists regarding the durability of the truce and the ultimate outcome of negotiations between the United States and Iran. At the same time, elevated energy prices remain a concern, as they could fuel inflationary pressures and potentially delay anticipated interest rate cuts by central banks worldwide.

In such a volatile environment, investors may benefit from focusing on high-quality dividend stocks to strengthen their portfolios while generating steady passive income. Notably, dividend-paying stocks have historically outperformed their non-dividend-paying counterparts over the long term, making them an attractive option during periods of uncertainty.

Against this backdrop, let’s explore two top-quality dividend stocks that currently present compelling buying opportunities.

Enbridge

Enbridge (TSX: ENB) stands out as a top dividend stock, supported by reliable cash flows, consistent dividend growth, an attractive yield, and a solid long-term outlook. The company transports oil and natural gas across North America through an extensive pipeline network, operating under a tolling framework and long-term take-or-pay contracts that provide stable and predictable revenue.

In addition to its core pipeline business, Enbridge owns three low-risk natural gas utilities and a growing portfolio of renewable energy assets backed by long-term power purchase agreements (PPAs). A meaningful portion of its earnings is also indexed to inflation, helping shield its financial performance from rising costs.

This combination of a resilient business model and steadily expanding asset base has enabled Enbridge to deliver strong financial results while consistently rewarding shareholders. The Calgary-based energy infrastructure giant has paid dividends for more than 70 years and increased its payout for 31 consecutive years. It currently offers a compelling forward yield of around 5.1%.

Looking ahead, oil and natural gas could remain key components of the global energy mix, even as the transition to cleaner energy continues. Growing production and demand across North America should support long-term utilization of Enbridge’s infrastructure. At the same time, the company has identified a substantial $50 billion growth pipeline and plans to invest $10–$11 billion annually to advance these opportunities.

With these growth initiatives in place, management expects adjusted earnings per share (EPS) and distributable cash flow (DCF) per share to grow at a steady, single-digit pace. Overall, Enbridge appears well-positioned to sustain dividend growth, making it an attractive option for income-focused investors.

Bank of Nova Scotia

Another top dividend stock I believe would be an excellent buy is the Bank of Nova Scotia (TSX:BNS), which offers banking services across approximately 55 countries. Given its diversified revenue streams, the company enjoys healthy, stable cash flows, enabling it to pay dividends consistently since 1833. Besides, the bank has raised its dividends at an annualized rate of 4.7% over the last 10 years and currently offers a forward yield of 4.5%.

Moreover, the bank has started this fiscal year on a solid note, delivering a healthy first-quarter performance. Its adjusted EPS grew 16.5% year over year to $2.05, driven by solid performance across all four of its core business segments. Besides, its common equity tier 1 (CET1) ratio improved by 10 basis points to 13.3% amid higher retained earnings and the divestiture of operations in Colombia, Costa Rica, and Panama.

Along with these improved operating and financial performances, BNS continues its strategic repositioning by expanding its North American operations while reducing exposure to higher-risk Latin American markets, which should lead to more stable and sustainable earnings growth. Also, the management has announced a new 12-month share repurchase program of 15 million shares, which would reduce its shareholdings by 1.2%. Amid these healthier growth prospects, I believe BNS is well-positioned to continue paying dividends at a higher rate, making it an excellent buy.

The post 2 Canadian Dividend Giants Worth Buying While Rates Stay Put appeared first on The Motley Fool Canada.

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More reading

• 3 Canadian Dividend Stocks That Could Be a Great Fit for Retirees
• 4 Canadian Stocks That Could Pay Off for Patient Investors in 2026 and Beyond
• 2 Powerful Stocks I’d Feel Confident Holding for the Next 5 Years
• TFSA: Invest $14,000 in This TSX Stock and Create $725.60 in Annual Passive Income
• 3 Stocks I’d Buy Today and Hold Comfortably All the Way to 2031

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Bank of Nova Scotia and Enbridge. The Motley Fool has a disclosure policy.