Dividend investing is an excellent way to put your money to work in the stock market. When you invest in shares of a dividend stock, the underlying business distributes a share of its profits to investors.
Depending on the number of shares you own, you can line your account balance with significant money. Instead of just buying low and selling high, you get another way to grow your wealth through dividend investing.
Besides the capital gains potential they offer, dividend stocks keep growing your account balance through regular distributions.
High-quality dividend stocks also increase the payouts to their investors regularly. Instead of focusing on companies purely based on whether they pay high-yielding dividends, it is better to pick stocks that reputably pay regular dividends and grow payouts.
Canadian Dividend Aristocrats are dividend stocks that have increased their payouts for at least 15 years. If you want reliable dividend income in your self-directed portfolio, picking dividend stocks can be an excellent strategy. Today, we will look at a Canadian Dividend Aristocrat with a 27-year dividend streak: Enbridge (TSX:ENB).
High-yielding dividend stock
As of this writing, Enbridge stock trades for $46.92 per share, paying its shareholders at a juicy 7.57% dividend yield. Typically, such high-yielding dividends are a cause for concern. When investing in dividend stocks, you must ensure the underlying business has stable enough cash flows to fund its payouts.
Enbridge is a $99.73 billion market capitalization giant in the Canadian energy industry. Headquartered in Calgary, it owns and operates pipelines throughout Canada and the United States. Its energy transportation infrastructure is crucial to the region’s economy. Enbridge is responsible for transporting a massive portion of all the hydrocarbons used in North America.
Enbridge’s pipeline network is responsible for transporting approximately a fifth of all the natural gas the U.S. consumes. Additionally, it transports just less than a third of all the crude oil produced in North America. Enbridge also has a natural gas utility business and a rapidly growing portfolio of renewable energy assets.
Massive barriers to entry
Enbridge is in the pole position to remain a leading player in the energy industry. Even as it shifts to renewables, the energy industry requires substantial capital to establish a strong presence. With regulatory hurdles and various other barriers to entry there to make life difficult for new companies, Enbridge stock can continue thriving as a top energy company in the region.
It comes as no surprise that Enbridge stock continues to invest billions more in expanding its infrastructure. As it future-proofs itself with renewable energy investments, Enbridge looks well positioned to continue its streak as a Canadian Dividend Aristocrat.
Foolish takeaway
While a lengthy dividend growth streak does not guarantee it will continue the same trend forever, Enbridge stock appears healthy enough to pull it off successfully. If you’re looking for relatively safe but high-yielding income from dividend stocks, Enbridge can be an excellent foundation for your self-directed investment portfolio.
