How to Make $1,000/Year With Enbridge Stock

Enbridge’s unwavering commitment to maintaining and increasing its dividend makes it a top passive-income stock.

| More on:

Image source: Getty Images.

Investors in pursuit of passive income might consider allocating funds to shares of companies sporting a robust history of consistent dividend distribution and growth. It is advisable to invest in corporations with a resilient business model. Moreover, investors should look for companies with well-established businesses, diversified revenue streams, and the ability to generate profitable growth. Further, these enterprises must have a sustainable payout ratio.  

This emphasis is crucial since companies with solid fundamentals and a commendable track record of dividend payouts tend to sustain and increase their payouts, regardless of economic fluctuations and stock market volatility. Consequently, such companies can be relied upon to generate passive income without much concern.

Fortunately, the TSX has numerous high-quality dividend-paying stocks that have sustained and increased their dividends for years, regardless of market conditions. Enbridge (TSX:ENB) is a noteworthy example of such a company.

With this background, let’s examine the factors that make Enbridge a top passive-income stock. Moreover, I’ll discuss how many shares you need to buy to make $1,000/year from Enbridge stock.

Enbridge: A solid passive-income stock

Enbridge provides the transportation and export of oil and gas. Additionally, it manages a large natural gas utility business and sports a growing portfolio of renewable energy assets. Given its pivotal role in the energy value chain, Enbridge enjoys consistent demand, and its assets constantly experience high utilization. This operational strength enables the company to generate robust distributable cash flows (DCF), providing a solid foundation for its dividend payments.

Notably, Enbridge has a commendable track record of dividend payments and growth. As a Dividend Aristocrat, the company has been distributing and increasing its dividend for several years. To be precise, it has paid a regular dividend for an impressive 69 years. What sets it apart is the fact that Enbridge has consistently increased its dividend for 29 consecutive years. Furthermore, its dividend has demonstrated an impressive compound annualized growth rate (CAGR) of 10% during the same period, surpassing that of its peers.

Another distinguishing factor is Enbridge’s unwavering commitment to maintaining and increasing its annual dividend even during the challenges posed by the pandemic. While many energy companies suspended or reduced their payouts, Enbridge demonstrated resilience by enhancing shareholders’ value.

Enbridge’s revenue streams are highly diversified, supported by solid demand for its services. Further, long-term customer contracts, regulated cost-of-service tolling arrangements, and power-purchase agreements augur well for growth. Additionally, Enbridge is poised to benefit from its multi-billion-dollar secured projects and investments in both conventional and renewable energy assets. In addition to organic growth, Enbridge’s accretive acquisitions will likely accelerate its growth, further boosting its DCF per share.

The company pays a quarterly dividend of $0.915 per share, reflecting a yield of over 7.7%. Moreover, its payout ratio of 60-70% of DCF is easily sustainable in the long term.

Make $1,000/year with Enbridge stock

With its reliable dividend payments and resilient business model, Enbridge stands out as a top stock for making steady passive income. The table below shows that by buying 274 shares of Enbridge, one can earn a passive income of over $250.7 per quarter or over $1,000/Year. 

CompanyRecent PriceNumber of SharesDividendTotal PayoutFrequency
Price as of 12/07/2023

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

More on Dividend Stocks

question marks written reminders tickets
Dividend Stocks

Dividend Investors: Is BCE Stock a Buy Now?

BCE now offers a 7.9% dividend yield.

Read more »

edit Taxes CRA
Dividend Stocks

CRA Money: 2 More Days to Boost Your Tax Refund!

Dividend stocks like Toronto-Dominion Bank (TSX:TD) can be great RRSP holdings.

Read more »

grow money, wealth build
Dividend Stocks

3 TSX Dividend Stocks With Yields Above 7% (But Are They Safe?)

These three dividend stocks all have ultra-high yields, making them some of the best to buy if you're looking to…

Read more »

Light bulb with jester hat perched on top
Dividend Stocks

3 Canadian Dividend Stocks With Payouts That Are No Joke 

Here are three top Canadian dividend stocks long-term investors would be remiss to ignore, particularly at these current valuations.

Read more »

rail train
Dividend Stocks

Canadian National Railway Stock: Buy, Sell, or Hold?

Railways like Canadian National Railway (TSX:CNR) are great long-term options. But is now the time to buy Canadian National Railway…

Read more »

clock time
Dividend Stocks

Is it Too Late to Buy These 3 Brilliant Passive Income Stocks?         

TD Bank stock is just one of three stocks that are well positioned to continue to provide passive income for…

Read more »

analyze data
Dividend Stocks

3 Essential Benefits to Claim on Your 2023 Taxes

Be sure to claim the dividend tax credit on dividend stocks like Brookfield Asset Management (TSX:BAM).

Read more »

a person prepares to fight by taping their knuckles
Dividend Stocks

Better Buy: Brookfield Asset Management or Fairfax Financial Stock?

Both of these stocks are certainly strong. But when it comes right down to it, which offers the best deal…

Read more »