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Highlights
- As there is no guarantee of returns in a stock market, investors should select their stocks carefully.
- In 2022, the GAAP earnings of Enbridge amounted to C$ 2.6 billion, down from C$ 5.8 billion.
- Suncor's dividend yield at the time of writing was 4.9 per cent.
Two of Canada's most popular energy equities are Enbridge (TSX:ENB) and Suncor Energy (TSX:SU), respectively. One is a pipeline company, and the other one is an integrated energy corporation.
Although both companies operate completely diverse businesses, dividends are a key characteristic that unites them.
Due to their extremely high dividend yields, Suncor and Enbridge are both desirable investments for dividend investors. However, dividend yield shouldn't be the only factor considered before buying any stock.
Research and analysis are important for any investor. Hence, let's see how both these companies have performed in the recent past:
Enbridge Inc. (TSX: ENB)
The energy company's dividend yield was 6.9 per cent as of writing. Enbridge paid a quarterly dividend of C$ 0.887 per share and has grown by five per cent in the last three years.
In 2022, the GAAP earnings of Enbridge amounted to C$ 2.6 billion, down from C$ 5.8 billion in 2021. However, the adjusted earnings were C$ 5.7 billion, slightly up from C$ 5.6 billion in the same comparable period.
Notably, the adjusted EBITDA of the energy company was C$ 15.5 billion in 2022, up from C$ 14 billion in 2021. Also, the cash provided by operating activities jumped to C$ 11.2 billion from C$ 9.3 billion.
Enbridge said in its financial statement that its quarterly dividend increased by 3.2 per cent in 2023, reaffirming the 2023 guidance range for EBITDA.
Suncor Energy Inc. (TSX: SU)
Suncor's dividend yield at the time of writing was 4.9 per cent, and it paid a quarterly dividend of C$ 0.52 apiece. The market cap of the energy company was C$ 55.4 billion.
In Q4 2022, the company's net earnings amounted to C$ 2,741 million, reflecting strong growth from C$ 1,553 million in Q4 2021. Meanwhile, the adjusted operating earnings stood at C$ 2,432 million, up from C$ 1,294 million.
In 2023, Suncor plans to continue to execute on its capital allocation framework. It is important to note that it returned a record value to shareholders in 2022, which was C$ 7.7 billion.
Bottom line
As there is no guarantee of returns in a stock market, investors should select their stocks carefully to avoid losing their money in the market.
Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
