Over the past few years, the top energy companies in Canada have drastically improved their balance sheet and dividend payouts. As oil prices have increased, two major Canadian companies, Enbridge (TSX:ENB) and Suncor (TSX:SU), are anticipating drastic growth in 2024.
Both new and existing shareholders can use this time to increase their share of the profits that these companies are going to generate.
Let’s dive into why this is the case, and why now may be a great time to consider these two dividend stocks.
Another dividend hike on the horizon for Enbridge
The Canadian pipeline and utility giant Enbridge recently announced its financial expectations for 2024. This company aims to bring forth single-digit growth in revenue and cashflow backed by higher demand, low US inventory, and an increase in exports.
As a result, Enbridge has the confidence to increase its dividends by 3.9% for 2024. Taking a look at its dividend history, this happens to be the 29th year in which dividends were increased.
Enbridge is looking ahead to generate growth in all of its major businesses. This includes its gas distribution and storage, liquid pipelines, renewable energy and gas transmission, and mainstream segments.
Strong performance and long-term outlook
Enbridge stock was a relatively poor performer over the past decade due to various factors. However, in recent years, the company opened up new growth opportunities and increased investors’ interest through dividends.
One of the main reasons for the decline in Enbridge stock was its reliance on carbon pipelines during a period when the market was shifting towards more renewable resources. Cut to today, Enbridge is moving towards a cleaner direction with its aim to buy three more natural gas projects in 2024.
After this deal is executed, Enbridge’s business will be much more diversified. Its EBITDA can then be broken down into 50% from oil pipes, 22% from natural gas utilities, 25% from natural gas pipelines, and 3% clean energy.
As per analysts, this company’s 7.6% dividend yield makes it perfect for investors looking to earn steady profits over a long-term investment horizon.
Options markets predict a spike in Suncor stock
It is high time for investors to pay close attention to the stocks of Suncor Energy Inc., especially in the options market. As per analysts, options traders are anticipating a substantial change in Suncor stock. As a result, a number of the company’s January 2024 call options are denoting some impressive upside potential in Suncor.
Currently, Suncor stock pays out a 5% dividend yield while reflecting possibilities for long-term capital growth. Thus, investors looking forward to financial growth with dividends can go ahead and invest in SU stocks for 2024.
Suncor plans to increase its production as 2024 sets in. According to its forecast, its production target for 2024 might look like 770,000 to 810,000 barrels per day. Furthermore, its expected capital expenditure for 2024 ranges between $6.3–$6.5 billion. This will allow Suncor to develop its infrastructure and improve its market position.
Bottom line
Energy giants Enbridge and Suncor are likely to see a fruitful 2024 (or at least, that’s what the experts suggest). Accordingly, for those seeking a combination of dividend income and growth, these are two stocks I’d recommend looking at now.
