The Canadian Dividend Stock I Trust Most to Weather Any Kind of Market Storm

Dividend stocks are among the top investments for building a passive-income stream. However, difficult operating conditions or economic downturns could affect payouts. For instance, numerous Canadian companies either reduced or suspended payouts to preserve liquidity during the COVID-19 pandemic. More recently, even established income names such as BCE (TSX:BCE) have cut dividends in response to a challenging operating environment.

However, there are a few high-quality Canadian dividend payers that have consistently paid and even increased dividends through financial crises, recessions, and sector-specific downturns. The resilience of their earnings and cash flow, and the rock-solid nature of their payouts, make them all-weather stocks.

Against this background, here is a dividend stock I trust most to weather any kind of market storm.

A dependable dividend stock: Enbridge

The Canadian equity market has several stocks that have been paying and increasing their dividends for decades. Among these top dividend payers, Enbridge (TSX:ENB) looks like a compelling investment for resilient payouts, high yield, and the ability to consistently increase its dividend.

Enbridge operates primarily as a midstream energy company, transporting oil and natural gas through an extensive pipeline network across North America. Much of its income is secured through long-term contracts and regulated frameworks, which provide predictable earnings and steady distributable cash flow (DCF). This structure allows it to deliver a relatively stable cash flow, regardless of market volatility.

Enbridge benefits from high asset utilization and, in most cases, inflation-linked pricing, both of which contribute to consistent cash flow growth. The company’s approach to capital allocation further strengthens its investment profile. By targeting a payout ratio of 60% to 70% of DCF, Enbridge continues to reward shareholders while reinvesting in the business. This leaves enough retained cash to fund new projects and maintain financial flexibility.

Enbridge’s long history of dividend increases, dating back to 1995, adds confidence. The company has maintained and grown its payout through major economic disruptions, including the COVID-19 pandemic. This track record reflects the resilience of its business and management’s disciplined approach to dividend payouts.

Looking ahead, Enbridge’s continued focus on expanding its DCF, along with a strong pipeline of low-risk growth projects, means the company remains well-positioned to pay and increase its dividend.

Enbridge to keep returning higher cash

Enbridge is well-positioned to continue returning more cash to shareholders through higher dividends. Its highly diversified portfolio positions it well to capitalize on long-term energy demand while mitigating direct sensitivity to commodity price fluctuations.

The energy infrastructure company’s management expects to deliver adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $20.2 billion to $20.8 billion and DCF per share between $5.70 and $6.10 in 2026. Further, adjusted earnings per share (EPS) are projected to grow by 4% to 6%. Its growing earnings and DCF are likely to support higher payouts.

Beyond 2026, Enbridge’s management projects adjusted EBITDA, EPS, and DCF per share to increase by about 5% annually. This outlook suggests that the company’s asset base and contract structure should continue generating steady earnings as new projects come online and existing infrastructure operates at higher utilization levels.

Supporting my bullish outlook is the company’s secured capital backlog, which currently stands at about $39 billion. These projects span natural gas transmission and distribution, liquids pipelines, and renewable power initiatives, positioning the company to capture rising energy demand across North America. Because much of this backlog is supported by long-term agreements or regulated frameworks, the future revenue streams associated with these investments are relatively predictable, which supports higher dividend payments and Enbridge’s investment case.

The post The Canadian Dividend Stock I Trust Most to Weather Any Kind of Market Storm appeared first on The Motley Fool Canada.

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More reading

• 3 Dividend Stocks That Belong in Almost Every Investor’s Portfolio
• 3 Canadian Stocks I’d Buy Before Volatility Returns
• A 5% Yield Pipeline Stock That Could Have a Breakout Year
• How a $10,000 TFSA Investment Could Be Set Up to Generate Steady Cash Flow 
• 2 High-Yield Dividend Stocks That Could Be a Safer Bet for Canadian Retirees

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.