Should You Buy Enbridge (TSX:ENB) Stock Before 2022?

This energy stock on the TSX has been on an upward trend throughout the year, and it might be worth buying before the next year begins.

| More on:

Image source: Getty Images

Long-term investors have a wealth of options to consider on the TSX when looking for suitable investments that align with their financial goals. The worst period of the pandemic saw most of the energy industry stocks in Canada decline to devastating levels. However, 2021 has been a completely different story for the energy industry.

As economies began reopening, the surge in energy demand led to a massive uptick for the broader energy industry. Enbridge (TSX:ENB)(NYSE:ENB) stock has long been an excellent dividend stock for long-term investors.

If you’re just starting investing, picking strong assets that can provide you with reliable wealth growth through capital appreciation and shareholder dividends could be an excellent way to build strong foundations for your investment portfolio. Today, I will discuss Enbridge stock to help you determine whether it could be a good investment for you to consider.

A leading energy company with an eye for the future

Enbridge is one of the leading energy infrastructure companies in North America. Its extensive pipeline network is responsible for transporting a fifth of all the crude oil used in the U.S. and 25% of all the natural gas consumed in North America. With energy prices rising in the current environment, Enbridge is in a sweet spot to boost its short- and medium-term cash flows.

The biggest problem for energy companies is that fossil fuels will gradually be phased out for more environmentally friendly alternatives. The carbon emissions produced directly or indirectly by fossil-fuel-related businesses create a headwind for them. However, Enbridge stock investors might not have to worry about the long-term prospects for the company considering the circumstances.

As things stand, the shift to green energy could take a long time to materialize fully. Until that happens, conventional energy will continue to play a critical role in the economy’s growth. Until the transition can occur, Enbridge and its peers could continue relying on fossil fuel-related revenues to boost their cash flows.

Meanwhile, Enbridge continues to invest in expanding its renewable energy portfolio to gear up for the gradual shift to green energy and eliminating carbon emissions.

Foolish takeaway

Transitioning to green energy is critical, and Enbridge has been one of the companies making substantial efforts to reduce its environmental impact in recent years. However, the transition might take a long time to happen, making the conditions ideal for Enbridge stock’s near-term prospects as a value proposition.

At writing, Enbridge stock is trading for $48.74 per share, and it boasts a juicy 6.85% dividend yield. You can pick up Enbridge stock right now to enjoy wealth growth through substantial shareholder dividends and long-term capital growth as its share prices appreciate.

Enbridge stock recently declined by 9.54%. It is in a reasonably priced territory, and the stock boasts a high dividend yield and strong growth prospects. It could be an excellent addition to your portfolio today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge.

More on Energy Stocks

A stock price graph showing growth over time
Dividend Stocks

Up 8% in 3 Months, Is Fortis Stock a Buy Today?

Fortis stock (TSX:FTS) continued to show signs of recovery this fall, but as we enter a new year, is the…

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Better Buy: Suncor Energy Stock or Cenovus Energy Stock?

Suncor Energy (TSX:SU) and Cenovus Energy (TSX:CVE) are great energy stocks to watch going into year-end.

Read more »

Gas pipelines
Dividend Stocks

Canada’s Pipeline Powerhouse: Is Enbridge’s Yield Too Good to Ignore?

Enbridge generates stable cash flows to support a safe and high dividend yield, which could appeal to income investors.

Read more »

tsx today
Energy Stocks

TSX Today: What to Watch for in Stocks on Thursday, December 7

An early morning recovery in commodity prices could lift the main TSX index at the open today.

Read more »

Gas pipelines
Energy Stocks

Should You Buy Enbridge Stock for its 7.7% Yield Today?

Enbridge is moving higher after a long decline. Is the ENB stock still oversold?

Read more »

funds, money, nest egg
Dividend Stocks

3 Stocks to Turn $1K Into $5K in 2024

Three stocks that outperform this year amid massive headwinds could deliver far superior returns in 2024.

Read more »

Oil pumps against sunset
Energy Stocks

Where to Invest in Oil Stocks in December 2023

Here's why you may consider investing in energy infrastructure companies such as Enerflex in December 2023.

Read more »

Target. Stand out from the crowd
Energy Stocks

Got $1,000? 1 Undervalued Stock to Invest in for December 2023

Athabasca Oil is a cheap energy stock trading at a steep discount to consensus price target estimates in December 2023.

Read more »