For investors looking for safe and meaningful yield, Enbridge Inc. (TSX:ENB)(NYSE:ENB) stock has delivered. Shareholders have benefited from Enbridge’s dividend payments in the good and bad times. Today, Enbridge stock is yielding 7.3%.
Enbridge has benefited from its leading position in Canada’s energy transportation and distribution industry. The company recently updated investors and discussed its future — and it’s a bright future.
Here are three quotes investors should hear before they make decisions about Enbridge stock:
“long-term energy demand trends remain intact”
Enbridge is reiterating that global energy consumption is continuing to rise and that all sources of energy are needed. The company is backed up by the International Energy Agency’s forecasts. These forecast have and will continue to inform Enbridge’s strategic decisions, such as the decision to move forward on its pipeline extensions and expansions.
Another trend that will continue to gain steam is increasing exports. North America’s crude oil and natural gas is very competitive globally. There will therefore continue to be strong demand for it globally.
Enbridge sees “$1 billion in annual growth opportunities in renewables”
Enbridge believes that a diversified approach is the way to go — one that emphasizes a gradual transition through natural gas and renewables is the best way forward. The company will therefore continue to invest in pipelines while increasing its investment in renewable energy.
In addition, 55% of Enbridge’s earnings are currently from its liquids pipelines business, while 40% is from gas transmission and storage and 4% is from renewables. Enbridge is focusing on Europe for its renewables investment as the industry is more developed there.
Not surprisingly, the International Energy Agency forecasts that renewables will be the fastest-growing energy source. The agency forecasts a 351% growth rate through to 2040 in the renewables segment. Renewables and clean energy sources will take much of the incremental demand. Oil and coal will hold firm in this period.
It’s good business for Enbridge to invest in renewable energy sources. Their plan to do this reflects a slow and steady approach. This approach is consistent with Enbridge’s conservative, low-risk business model. It is “built for resiliency.”
“North American LNG will grow to one third of global exports”
Liquified natural gas, or LNG, is one of the many controversial topics for Enbridge. Despite this, Enbridge is increasing its exposure to the fast-growing LNG market in a big way. For example, Enbridge has increased its presence in the U.S. Gulf Coast. This is an important and a key export hub for oil and LNG.
But this is only one of the many areas in which Enbridge has increased its presence. Enbridge has also invested in many other areas for exposure to the LNG boom. North American LNG exports are expected to increase dramatically in the next 20 years. Enbridge is positioning itself for this growth.
Foolish bottom line
Enbridge stock has proven to be resilient over the course of many decades. This makes sense, as Enbridge is one of Canada’s leading energy infrastructure stocks.
The company has an impressive track record of providing investors with stable and reliable dividend income. Investors can expect this to continue as Enbridge invests for the future.
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Fool contributor Karen Thomas has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.