Buy 564 Shares of This Top Dividend Stock for $2,000/Year in Passive Income

Investors planning to start a passive income stream could consider exploring shares of companies that regularly distribute dividends and have strong fundamentals. This is because companies with solid fundamentals and a history of consistent dividend payments and growth tend to maintain and even enhance their payouts irrespective of economic situations and stock market volatility. Consequently, these corporations emerge as dependable sources of stable passive income.

Fortunately, the TSX has numerous companies with a proven track record of paying and growing dividends, making them reliable passive income options. These firms have well-diversified revenue streams, robust business models and continue to grow their earnings base, which enables them to sustain their payouts, irrespective of where the market moves. 

With reliable passive in mind, let’s delve into a top dividend-paying stock in Canada. By acquiring 564 shares of this super dividend stock, one can generate an annual passive income of $2,000.

The top dividend stock

While there are numerous high-quality dividend stocks trading on the TSX, one that has caught my attention is Enbridge (TSX:ENB). The energy infrastructure company focuses on transporting crude and natural gas and plays a crucial role in North America’s energy supply chain. 

Enbridge is responsible for moving a significant amount of crude and natural gas in North America. Additionally, the company operates a natural gas utility business and has a growing portfolio of renewable energy assets. 

Given the company’s strategic position in the energy value chain, Enbridge benefits from highly diversified revenue streams and consistent demand for its services, leading to high asset utilization. This enables the company to generate strong distributable cash flows (DCF), which form a solid foundation for its dividend payments. Furthermore, its long-term contracts, regulated cost-of-service tolling arrangements, and power-purchase agreements provide stability to its cash flows and support dividend payouts.

Thanks to its solid business model, Enbridge has a remarkable track record of dividend payments and growth. This Dividend Aristocrat has been paying a dividend for over 68 years. Moreover, the company has increased its dividend at an average annualized growth rate of 10% for 28 consecutive years. 

Investors should note that Enbridge paid and increased its dividend even during the pandemic when many energy companies either reduced or suspended their payouts. This shows the resilience of its cash flows and focus on enhancing its shareholders’ value. Further, ENB offers a high yield of 7.9% near current levels.

Here’s how to earn $2,000/year with Enbridge stock

Enbridge’s solid dividend payment and growth history, resilient business model, and growing earnings base make it a dependable stock to earn worry-free passive income. 

Further, its ongoing investments in conventional assets and the lower-carbon platforms (renewables) position Enbridge well to capitalize on long-term energy demand.  

Low-capital expenditures, utility-like growth projects, and accretive acquisitions bode well for future growth and will likely support its dividend payments. The table below shows that by buying 564 shares of Enbridge, one can earn a passive income of over $500 per quarter, or $2,000/year.

While Enbridge is a dependable dividend stock to earn steady passive stock, investors must not put all their cash in one company’s shares. Instead, diversify investments to lower risk and generate solid dividend income.