With 2025 ending off with a little bit of a plunge, with the TSX Index dipping simply north of 1% from peak ranges, questions linger as as to whether the year-end shedding streak will probably be adopted by much more weak spot as 2026 kicks off. Undoubtedly, regardless of the tough vacation week of buying and selling and what seems to be a little bit of a Santa Claus mini-sell-off, the outlook for the brand new 12 months is fairly good, with numerous massive banks and market strategists in search of respectable beneficial properties forward, with some bulls open to the S&P 500 rising near and even above the 7,000 mark.
In any case, ending a sizzling 12 months with a little bit of a breather, I imagine, might set the stage up very properly for one more 12 months of beneficial properties for the TSX Index. And on this piece, we’ll take a look at just a few bargains that buyers might want to take into account with their 2026 TFSA (Tax-Free Financial savings Account) contribution of $7,000.
So, whether or not you’re in search of a extra defensive dividend payer or a reputation that may supply the perfect of each worlds (assume development and yield), take into account shares of midstream vitality titan Enbridge (TSX:ENB) on weak spot.
Enbridge inventory is in a little bit of a droop, however the dividend is a shining star
Shares of the pipeline agency are down simply shy of seven% from their all-time highs, with a market-lagging 6% beneficial properties for 2025. Whereas 2026 could possibly be one other uneven 12 months for the Canadian oil patch, I do see the main pipeline companies as greater than in a position to proceed marching increased as new pipelines enter service within the subsequent 18 months.
The brand new 12 months in all probability received’t have all too many surprises for Enbridge, because it seems to be to maintain elevating the bar on its dividend as money flows proceed to rise. Whether or not we’re speaking about new fuel storage or pipeline expansions, or the potential for rates of interest to fall additional in 2026, it actually looks like the items are there to gas a good rally for the 12 months forward.
On the time of this writing, shares have a 5.9% dividend yield. Because the AI increase continues to unfold to the vitality scene, with better demand for the transmission of pure fuel, it seems to be like Enbridge is well-equipped to serve up a single-digit share dividend hike within the new 12 months.
With a rock-solid steadiness sheet and greater than sufficient monetary flexibility to maintain investing in predictable cash-flow-generative initiatives, maybe it’s time to present Enbridge shares the advantage of the doubt, even when the vitality terrain proves bumpier for companies working upstream.
Shares look to be a bit pricier going into 2026, however that’s okay
In fact, the 21.1 instances ahead price-to-earnings (P/E) a number of actually appears to be costly. On a trailing P/E foundation, shares go for near 26 instances.
Given the stableness of money flows and the historical past of dividend development, some premium, I believe, is deserved. However for the affected person, there could be a chance to scoop up shares at beneath 20.0 instances ahead P/E within the new 12 months, particularly if the current bumps out there street result in a first-quarter market drop.
As a substitute of spending the whole thing of your 2026 TFSA contribution on the title at $65 and alter, maybe shopping for a half place now ($3,500) and the opposite half on an additional dip beneath $60 could possibly be a recreation plan. Both approach, Enbridge is a must-watch, given its status as a sturdy dividend grower to personal via all types of market “climate.”
