Buy 282 Shares of This Super Dividend Stock for $1,000/Year in Passive Income

Investors who seek immediate passive income could consider investing in fundamentally strong dividend-paying stocks. Even though the stock market remains volatile, these fundamentally strong stocks maintain their dividend payments and consistently increase the same at regular intervals, making them a dependable source to earn steady income in all market conditions.

Thankfully, the TSX has several such companies that have been paying and growing their dividends for years, making them reliable passive-income stocks. These companies have diversified revenue streams, resilient business model, and a growing earnings and cash flow stream to support their payouts, regardless of where the market moves. 

With this background, let’s delve into a top passive-income stock that offers an attractive yield of 7.5% (based on its closing price of $47.6 on September 15). By buying 282 shares of this super dividend stock, one can earn $1,000/year in passive income. 

The super dividend stock

While the Canadian stock market has several high-quality dividend stocks, one could consider buying the shares of energy infrastructure company Enbridge (TSX:ENB). The company is engaged in the transportation of oil and natural gas. Investors should note that Enbridge moves around 30% of the crude produced in North America. In addition, the company transports about 20% of the natural gas consumed in the United States. It also operates a large natural gas utility business and has interests in renewable energy facilities.

Given the company’s vital role in the energy value chain, it benefits from steady demand, and its assets witness a high utilization. This enables Enbridge to generate solid DCF (distributable cash flows), which supports its dividend payments. Also, the company’s long-term contracts, low-risk commercial arrangements, regulated cost-of-service tolling frameworks, and power-purchase agreements add stability to its cash flows and payouts.

Thanks to its resilient business model, Enbridge has been paying a dividend for 68 years. Furthermore, this large-cap company has uninterruptedly increased its dividend for 28 years at a CAGR (compound annual growth rate) of 10%. It’s worth highlighting that Enbridge even paid and raised the dividend during the pandemic when most energy companies stopped or reduced their payouts. This indicates the resiliency of its payouts and makes it a super dividend stock to earn dependable passive income.  

Earn $1,000/year with Enbridge stock

Enbridge’s ability to regularly pay and increase its dividend makes it a solid stock to earn reliable passive income. Looking ahead, the company’s two-pronged growth strategy of investing in conventional assets and expanding the lower-carbon platforms (renewables) bode well for growth and position Enbridge well to capitalize on long-term energy demand.  

Also, Enbridge’s low-capital and utility-like growth projects, inflation-protected earnings, and accretive acquisitions will likely support its earnings and future dividend payments. The table below shows that by buying 282 shares of Enbridge, one can earn a passive income of over $250 per quarter or $1,000/year. 

While Enbridge is a solid passive-income stock, investors must diversify their investments to reduce risk and earn worry-free dividend income.