ENB:CC - The Dividend Dream: 7 Percent Returns to Fuel Your Income Goals
2024-03-22 16:20:00 ET
Finding that perfect mix of investments that can provide growth and income for decades is a dream sought after by nearly all investors. Fortunately, the market gives us plenty of opportunities to meet that challenge and fuel your income goals.
Here’s a look at how you can fuel your income goals while keeping your investments on autopilot.
Lock in now and earn income for decades
Does your portfolio include Enbridge ( TSX:ENB )? If not, you may be missing out on one of the best ways to fuel your income goals. For those unfamiliar with the stock, Enbridge is one of North America’s largest energy infrastructure stocks .
Enbridge is best known for its lucrative pipeline network, which comprises crude and natural gas segments. The pipeline network is the largest and most complex system on the planet. The segment also provides the bulk of Enbridge’s revenue, which is both recurring and secure.
Part of the reason for that is the sheer volume of crude and natural gas that Enbridge transports each day. Specifically, Enbridge halls nearly one-third of all North American-produced crude. Turning to natural gas, that number is approximately one-fifth of the natural gas needs of the entire U.S. market.
Suffice it to say that makes Enbridge a very defensive investment option to consider. Additionally, that stable and recurring income can help fuel your income goals over the longer term.
But that’s not the only thing that Enbridge is known for.
The other parts of Enbridge
Enbridge also operates a large natural gas utility. Thanks to a series of well-executed acquisitions over the past year, Enbridge’s natural gas utility business is now the largest in North America, with a whopping seven million customers.
And like its pipeline segment, the natural gas business is extremely defensive, generating a recurring and stable revenue stream.
Enbridge also operates a growing renewable energy portfolio. Enbridge has dropped over $9 billion into growing that portfolio over the past two decades. Today, the renewable segment comprises over 40 facilities located across both North America and Europe.
Prospective investors should note one important point here. Renewable energy facilities share a commonality with their fossil fuel-burning peers. Those facilities generate a predictable and recurring revenue stream that is backed by long-term, regulated contracts.
Often, those contracts span decades in duration, providing a healthy revenue stream that allows Enbridge to invest in growth and pay out a very healthy dividend.
And that dividend can fuel your income goals.
Let’s talk about that dividend
Enbridge offers investors a very juicy quarterly dividend. As of the time of writing, that dividend carries a yield of 7.56%, making it one of the better-paying options on the market.
To put that earnings potential into perspective, let’s consider a $40,000 investment in Enbridge (which is always part of a larger, well-diversified portfolio).
For that initial outlay, investors can expect a first-year income of just over $3,030. The reason I say first-year is because Enbridge has an established cadence of providing generous annual bumps to that dividend going back three decades.
Fuel your income goals with Enbridge
There’s one more point to consider: timing. Despite the massive appeal from its multiple business segments, Enbridge’s stock price still trades down by a whopping 16% over the trailing two-year period.
In other words, Enbridge is not only a great stock to fuel your income goals, but it also trades at a significant discount right now.
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Enbridge’s dividend, along with its current stock price, make it an appealing option to consider to fuel your income goals. Throw in the defensive appeal from its various segments above, and you have a stellar option for any well-diversified portfolio.
The post The Dividend Dream: 7 Percent Returns to Fuel Your Income Goals 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