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:
Pipeline

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

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

2 Energy Stocks That Could Hold Up if Oil Prices Turn

Suncor Energy (TSX:SU) and Cenovus Energy (TSX:CVE) are great energy stocks that could continue higher through 2023.

Read more »

oil tank at night
Energy Stocks

2 Sub-$3 TSX Energy Stocks I’d Buy in 2023

Here are two under-$3 TSX energy stocks you can buy in 2023 and hold for the long term.

Read more »

A bull and bear face off.
Energy Stocks

2 Top TSX Energy Stocks to Buy as Crude Oil Is Set to Soar Higher

TSX energy stocks might keep topping charts in 2023 as well.

Read more »

Oil pumps against sunset
Energy Stocks

Is the Oil Boom Over?

The energy boom is over but dividend stocks like ARC Resources (TSX:ARX) are still attractive.

Read more »

Road signs rerouting traffic
Energy Stocks

2 High-Yield Energy Stocks I’d Buy and 1 I’d Avoid

I would buy energy stocks like Enbridge Inc (TSX:ENB) this year.

Read more »

tsx today
Energy Stocks

TSX Today: What to Watch for in Stocks on Friday, January 27

The TSX Composite is on track to close the fourth consecutive week on a positive note.

Read more »

Solar panels and windmills
Energy Stocks

Algonquin Stock Has Broken Investors’ Hearts, but I Think It Will Turn a Corner

AQN stock faces more uncertainty in 2023, but could be a compelling value pickup for income investors.

Read more »

energy industry
Energy Stocks

2 Top Energy Stocks to Buy Right Now

These energy companies remain immune to the economic and commodity down cycles.

Read more »