Enbridge Stock: This Dividend Aristocrat Could Gain in 2024

Enbridge (TSX:ENB) stock is looking like a great buy as management expects it to grow in 2024.

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Enbridge (TSX:ENB) may very well be the most shareholder-friendly stock in Canada following the latest news of its next dividend hike. Indeed, the company has kept its dividend in one piece during some pretty turbulent times in the past.

Though Enbridge stock has been quite a rocky ride in recent years, income investors know they’ll continue to receive their dividend payments on schedule. And with the recent slump in shares of ENB, it’s comforting to know that the pipeline kingpin isn’t just keeping its payout intact; it’s raising it further, even as industry headwinds persist. That’s remarkable but not all too surprising, given I previously noted that Enbridge was likelier to raise its dividend through tough times than keep it static.

Dividend hike? Yes, please!

Next year, Enbridge is raising its dividend yet again, as management expects its business to grow. For the March 2024 payment, Enbridge will pay 91.5 cents per share. So, even though Enbridge stock is in a funk, investors have little to worry about when it comes to the dividend policy.

At the end of the day, Enbridge is a Dividend Aristocrat with a payout that can be relied on in the best and worst of times.

Enbridge stock: A Dividend Aristocrat that’s best in breed!

At writing, Enbridge stock is up nearly 9% from its October lows. With the dividend hike considered, I view a revisitation of those October lows as somewhat less likely, especially if the Canadian economy lands on soft footing. Even if Enbridge stock does return to the low $40 range, such a dip would be a great opportunity to score more yield for a lower price.

For November, the energy markets haven’t been all too kind with the price of oil sliding from more than $82 to just $75 and change. Despite the oil slip, the pipelines aren’t as sensitive to such steep fluctuations. If anything, the pipelines should be viewed as more utility-like than their producer peers. That’s not to say midstream energy companies don’t have their fair share of woes.

Pipeline stocks are a great deal right here, even with risks considered

Regulatory hurdles and rampant volatility still come with the territory. Regardless, longer-term investors have plenty of reasons to be a net buyer of the stock as it sags lower. The dividend yield is sure to beckon income-hungry Canadian investors, especially as interest rates start to retreat, perhaps as soon as 2024.

For now, Enbridge stock looks robust going into the new year. The latest round of results (third quarter) was quite solid, with management reaffirming its full-year guidance. The company’s acquisition of Dominion Energy’s U.S. assets looks like a win. But such a deal has added to the debt load.

Either way, I view management as being able to trim away at its debt while continuing to reward investors with handsome dividends (and consistent hikes over time). I think investors would be wise to give ENB stock the benefit of the doubt while it’s trading at a modest 17.1 times forward price-to-earnings.

The Foolish bottom line on ENB stock

Enbridge stock is cheap and its dividend is poised to keep growing from here. I view the stock as one of the best dividend buys for the next year, as I think the firm is well on track to grow at an impressive rate next year. For investors, the dividends keep on coming. And that’s enough reason to play the long game with the name!

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 Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

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