ENB:CC - Is Enbridge the Best Dividend Stock for You?
2024-02-14 20:00:00 ET
There’s no shortage of great investments on the market right now. And chief among those great investments is Enbridge ( TSX:ENB ), with its very juicy dividend. But is Enbridge the best dividend stock for your portfolio right now?
Let’s try to answer that question.
Meet Enbridge: The energy infrastructure behemoth
For those who are unfamiliar with the stock, Enbridge is one of the largest energy infrastructure companies on the planet. The company is best known for its lucrative pipeline business and for a good reason.
Across both its natural gas and crude segments, Enbridge hauls a lot of oil and gas. Specifically, the company transports nearly one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market.
That makes Enbridge one of the most defensive stocks on the market, but that’s not even the best part. While the pipeline business generates the bulk of Enbridge’s revenue, there are other intriguing aspects to consider.
One of those is Enbridge’s growing renewable energy business. Over the past two decades, Enbridge has invested over $9 billion into various renewable energy and power transmission projects.
Today, that network comprises over 40 renewable energy facilities located across North America and Europe. Collectively, those facilities have a net generating capacity of 2,371 megawatts, which is enough to power over 1.1 million homes.
Again, that’s not all.
Enbridge also operates the largest natural gas utility in North America, which serves nearly seven million customers. That new standing comes thanks to a trio of acquisitions for the East Ohio Gas Company, Questar Gas, and the Public Service Company of North Carolina completed late last year.
A key point here that prospective investors need to keep in mind is that, like its pipeline and renewable energy business, the utility business is very defensive.
In other words, long-term investors looking for the best dividend stock to buy right now should consider Enbridge.
Enbridge pays a crazy dividend
One of the main reasons why investors continue to flock to Enbridge is for the dividend it offers. Specifically, the company pays out a quarterly dividend that currently carries an insane yield of 7.89%.
To put that yield into context, let’s consider an investment of $40,000 (as part of a larger well-diversified portfolio).
For that initial investment, investors can expect to generate a first-year income of just over $3,200. Keep in mind that prospective investors who aren’t ready to draw on that income yet can choose to reinvest it until needed.
Additionally, it’s worth noting that Enbridge has provided healthy annual bumps to that dividend, going back nearly three decades without fail.
That handily makes Enbridge one of the best, if not the best, dividend stocks for any long-term portfolio.
Enbridge may be the best dividend stock, but will you buy it?
No stock, even the most defensive stock, is without some risk. Fortunately, Enbridge offers investors a reliable revenue stream from several defensive segments and a juicy dividend. Not only does this make Enbridge a best dividend stock candidate, but there’s one more final point to note.
Enbridge currently trades down over 16% over the trailing 12-month period.
In short, this makes it an excellent time to pick up a great long-term gem at a decent discount.
The post Is Enbridge the Best Dividend Stock for You? appeared first on The Motley Fool Canada .
Fool contributor Demetris Afxentiou has positions in Enbridge. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy .
2024