Enbridge: A Dividend Star for the Long-Term Investor

Entering the stock market often doesn't require large sums. Acquiring a single share of the Canadian energy company Enbridge can already lead to an attractive dividend yield. At a price of just over 40 US dollars per share, the company not only offers a respectable dividend but also the prospect of future price increases. For nearly 70 years, Enbridge has rewarded its shareholders with dividends, which have been continuously increased over the last 29 years. Currently, they pay their investors 0.915 Canadian dollars per share each quarter, which, at a share price of 40 US dollars, corresponds to a yield of 6.5%—well above the average of the S&P 500, which is just under 1.5%. Enbridge's dividend policy is based on a stable foundation: A diversified portfolio of infrastructure-driven energy businesses provides reliable revenue. Nearly 98% of EBITDA comes from fixed or contractually secured assets, highlighting the stability and predictability of earnings. Enbridge annually distributes 60% to 70% of its stable cash flow as dividends. The remaining part serves to finance expansion projects. Thanks to a strong investment-grade balance sheet and a moderate debt ratio, the company can continue to strengthen its position. The recent acquisition of a gas division from Dominion Energy and planned investments in the billions enhance Enbridge's growth potential and diversification. By 2029, the company has reserved more than 24 billion Canadian dollars for secured projects. These initiatives could increase cash flow by up to 5% annually and thus also raise dividends by the same degree. Enbridge offers not only a steady source of income but also the prospect of moderate price gains. With an average total return of about 10% annually, the invested capital could double in seven years, making it an enticing option for risk-averse investors. However, before investing in Enbridge, investors should note that there are other stocks with potentially higher return opportunities. Nevertheless, Enbridge remains a solid candidate for those seeking a safe haven for their capital.