The TSX has been on an upward trend for nearly three years, and many stocks are now trading near record levels. Investors have brushed off high energy prices, trade uncertainty, and sticky inflation in 2026, but these headwinds could potentially derail the rally in the coming year.
With headwinds possibly on the way, investors are wondering which top TSX dividend stocks might still be attractive right now for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on income and long-term capital gains.
Enbridge
Enbridge (TSX:ENB) is up from $44 per share in late 2023 to the current price of $79, and isn’t too far off the 2026 high.
The rally followed a pullback in 2022 and 2023 when the stock declined from $59, providing investors with a sense of the downside range that can occur in the stock when market conditions are less favourable for the company. In the case of the last dip, higher interest rates put pressure on borrowing expenses, which reduced profits and cut into cash flow.
Risks
The Bank of Canada and the U.S. Federal Reserve are currently watching inflation and economic strength very carefully to determine if they need to increase, hold, or reduce interest rates. Inflation has been above the 2% target for some time and drifted higher in recent months due to soaring oil prices. If high fuel prices start to push up prices on all goods, the central banks could be forced to raise interest rates. That would be a new headwind for Enbridge and other companies in the energy infrastructure and utilities spaces.
Opportunity
Enbridge pushed ahead with its growth program in the past few years, taking advantage of its strong balance sheet to make strategic acquisitions that are paying off for the broader business. Enbridge bought an oil export terminal in Texas for US$3 billion in 2021 and purchased three natural gas utilities in the United States in 2024. These assets complement the expansive oil and natural gas transmission infrastructure and position Enbridge to benefit from rising demand for oil and natural gas. The company moves about 30% of the oil produced in Canada and the United States, and roughly 20% of the natural gas used by American homes and businesses.
Enbridge is currently working on a $40 billion secured capital program that will help drive revenue and profit growth in the next few years. Management expects distributable cash flow (DCF) to rise by 5% annually over the medium term. This should support steady dividend increases. Enbridge raised the dividend in each of the past 31 years.
Investors who buy ENB stock at the current level can get a dividend yield of 4.9%.
The bottom line
Investors should brace for some near-term headwinds, but pullbacks would be an opportunity to add to the position. The long-term outlook for Enbridge should be positive, and you get paid well to ride out market turbulence. If you have some cash to put to work in a buy-and-hold dividend portfolio, this stock deserves to be on your radar.
