One top Canadian dividend stock that has been picking up steam of late is pipeline giant Enbridge (TSX:ENB)(NYSE:ENB). Known for its high-yielding payout and overall consistency, investors have become more bullish on it of late in the hopes that a new Republican government in the U.S. could result in friendlier relations between Canada and the U.S. with respect to oil and gas.
The stock currently yields around 6%, and that’s down from where it was months earlier. In six months, shares of Enbridge have risen by 30%, pushing it to a new 52-week high last week. Despite the risk of tariffs in the U.S., investors remain bullish on the business. Alberta Premier Danielle Smith has met with Donald Trump in a face-to-face meeting as there remains some hope that tariffs may be avoided. However, it remains a risk for many Canadian stocks as the new U.S. president takes over.
Enbridge has generally been a fairly stable company to invest in due to its long-term contracts and the important role its pipelines play in the oil and gas industry. And that can be why many investors aren’t overly concerned for now as a Republican government typically enacts favorable oil and gas policies.
But given the uncertainty ahead, investors may want to hold off on investing in Enbridge for the time being given its hot rally of late and the stock trading at a new high. Although Enbridge is a good long-term investment and can be a great income stock to hold on to, its price may drop lower as its valuation is a bit elevated right now and bad news relating to tariffs could lead to a selloff, at least in the short term.
