Achieving a perfect balance between income and growth stocks is something that all investors look to as part of a well-diversified portfolio. Enbridge (TSX:ENB) is one such example, and the company appeals to both income and growth investors.
#1: Enbridge is a well-diversified company with defensive appeal
Enbridge is well known as an energy infrastructure giant. But what few investors may not realize about the company is how diversified and how important Enbridge’s business segments are.
Perhaps the most well known of Enbridge’s segments is the company’s pipeline networks. Enbridge operates the largest and most complex pipeline network on the planet. In terms of volume, Enbridge hauls massive amounts of crude and natural gas across that network each day.
To put that volume into context, let’s clarify that with an example. Enbridge hauls approximately one-third of all North American crude, as well as one-fifth of the natural gas needs of the U.S. market.
Oh, and let’s not forget that Enbridge does not charge for use of that pipeline network by the price of the commodity. In other words, irrespective of the volatile price of oil, Enbridge continues to operate its pipeline and generate a handsome, recurring revenue stream.
If that’s not defensive enough, Enbridge also operates one of the largest natural gas utilities on the continent, and a growing renewable energy business (more on that in a moment).
This not only provides Enbridge with a recurring (and stable) source of revenue but also an impressive defensive moat and considerable long-term future potential.
#2: There’s massive long-term growth potential
Enbridge’s massive pipeline network generates the bulk of the company’s revenue, but the company also boasts long-term growth prospects. Much of that potential stems from the company’s growing renewable energy segment.
Renewable energy is growing in importance, particularly as traditional utilities are forced into transitioning to cleaner sources of energy. Enbridge has invested over $8 billion into its renewable segment over the past two decades.
Today that segment boasts over 50 different facilities located across North America and Europe. Those facilities include wind, solar, hydro, and geothermal elements, boasting a net generating capacity of over 2,100 megawatts.
Investors should note that like its fossil fuel-burning peers, those facilities are backed by long-term regulated contracts that span decades in duration.
In other words, apart from the growing need (and investment by Enbridge into renewables), the facilities provide a recurring and stable source of revenue for the company.
That fact alone makes Enbridge a great option that appeals to both income and growth investors, but there’s still one more important reason to note.
#3: Enbridge generates a juicy income
One of the main reasons why investors flock to Enbridge is the lucrative dividend that the company offers. As of the time of writing, Enbridge pays out a quarterly dividend with a yield of 6.78%.
This makes Enbridge one of the best-paying income stocks on the market, but that’s not even the best part.
Enbridge has provided an annual uptick to that already juicy dividend for over three decades. For investors with long-term timelines, reinvesting those dividends can be a great way to grow your portfolio.
Enbridge appeals to both income and growth investors
No investment is without risk, and that includes Enbridge. Fortunately, Enbridge is a well-diversified stock that appeals to both income and growth investors alike.
Prospective investors should also note that Enbridge currently trades down approximately 10% over the trailing 12-month period, making it a great time to buy.
In my opinion, Enbridge is a stellar long-term investment option. Buy it, hold it, and watch it grow.