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 dropping streak shall 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 yr is fairly good, with numerous large banks and market strategists on the lookout for first rate positive aspects forward, with some bulls open to the S&P 500 rising near and even above the 7,000 mark.
In any case, ending a scorching yr with a little bit of a breather, I consider, might set the stage up very effectively for one more yr of positive aspects for the TSX Index. And on this piece, we’ll take a look at a number of bargains that traders might want to contemplate with their 2026 TFSA (Tax-Free Financial savings Account) contribution of $7,000.
So, whether or not you’re on the lookout for a extra defensive dividend payer or a reputation that may supply one of the best of each worlds (suppose progress and yield), contemplate shares of midstream vitality titan Enbridge (TSX:ENB) on weak spot.
Enbridge inventory is in a little bit of a stoop, 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% positive aspects for 2025. Whereas 2026 may very well be one other uneven yr for the Canadian oil patch, I do see the main pipeline companies as greater than capable of proceed marching greater as new pipelines enter service within the subsequent 18 months.
The brand new yr in all probability gained’t have all too many surprises for Enbridge, because it appears to be like to maintain elevating the bar on its dividend as money flows proceed to rise. Whether or not we’re speaking about new gasoline storage or pipeline expansions, or the potential for rates of interest to fall additional in 2026, it definitely looks like the items are there to gasoline a good rally for the yr 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 larger demand for the transmission of pure gasoline, it appears to be like like Enbridge is well-equipped to serve up a single-digit proportion dividend hike within the new yr.
With a rock-solid steadiness sheet and greater than sufficient monetary flexibility to maintain investing in predictable cash-flow-generative tasks, 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 occasions ahead price-to-earnings (P/E) a number of definitely appears to be costly. On a trailing P/E foundation, shares go for near 26 occasions.
Given the stability of money flows and the historical past of dividend progress, some premium, I feel, is deserved. However for the affected person, there is likely to be a chance to scoop up shares at under 20.0 occasions ahead P/E within the new yr, particularly if the latest bumps available in the market highway result in a first-quarter market drop.
As an alternative 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 extra dip under $60 may very well be a sport plan. Both means, Enbridge is a must-watch, given its popularity as a sturdy dividend grower to personal by means of all kinds of market “climate.”
