Finding the right investments today can make the difference between retiring comfortably or working for several years longer than planned. Fortunately, the market gives us plenty of options to choose from. This includes some of the best dividend stocks for your portfolio, ones that can provide years if not decades of reliable dividend income.
Here’s a look at one such option to consider buying now for your portfolio.
Enbridge – the best dividend stock?
Enbridge (TSX:ENB) is a stock that should be familiar to most Canadians. Apart from operating one of the largest utilities on the continent, Enbridge also owns and operates the largest and most complex pipeline network on the planet.
That pipeline network generates the bulk of Enbridge’s revenue. It also helps make Enbridge a very defensive option to consider for your portfolio. To illustrate the defensive appeal of Enbridge, let’s take a moment to talk about volume.
Enbridge’s pipeline network transports nearly one-third of all North American-produced crude. It also transports nearly one-fifth of the natural gas needs of the U.S. market.
Let that immense defensive appeal sink in for a moment.
Incredibly, that’s not all. Enbridge also boasts other segments that are filled with long-term growth potential for investors.
Specifically, I’m referring to Enbridge’s growing renewables energy business. Enbridge has invested over $8 billion into the segment over the past two decades. Today that segment comprises a growing portfolio of over 40 facilities, including wind, solar and geothermal sites.
Those facilities are located across Europe and North America and generate a recurring and stable revenue stream. Collectively, those facilities generate over 2100 MW of energy, which can power over 960,000 homes.
In short, Enbridge is a well-diversified defensive stock that is full of growth potential. But what about that dividend?
Let’s talk about that juicy dividend…
Enbridge pays out a quarterly dividend, which at the time of writing works out to a tasty yield of 7.38%. That handily makes Enbridge one of the best-paying options on the market.
To illustrate that income potential, consider a $30,000 investment (always as part of a larger, well-diversified portfolio). Prospective investors can expect to generate a first-year income of approximately $2,200.
The reason I say first-year income is because Enbridge provides investors with a healthy annual uptick to that dividend. Enbridge has provided that increase for nearly three decades without fail. And those increases have averaged about 10%.
That fact alone may entice income-seeking investors to consider buying Enbridge. But there’s still one final reminder to note for investors.
Prospective investors that are not yet ready to draw on that income can opt to reinvest those dividends until needed. This will greatly increase any eventual income stream over the longer term.
Final thoughts
Is Enbridge the best dividend stock for your portfolio? For those investors who have a long-term horizon and are looking to generate a solid income stream, Enbridge is a hard-to-ignore stock.
In my opinion, Enbridge should form a part of every well-diversified portfolio.
Buy it, hold it, and watch it grow.
