Are you looking for Canadian dividend stocks that can help you generate reliable passive income and also grow your wealth over time? If so, you might want to consider Enbridge (TSX: ENB).
However, investing in a stock without understanding its main revenue streams, financial position, and growth opportunities isn’t wise. In this article, I’ll discuss Enbridge’s business model, financial growth trends, dividend history, and future growth prospects to answer all these questions. We can use these factors as a base to discuss whether Enbridge has the potential to make you super rich over time.
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Enbridge’s trustworthy business model
Enbridge is one of the largest energy infrastructure companies in North America, with a large network of pipelines, storage facilities, and renewable power assets. It currently has a market cap of $101.7 billion as its stock trades at $40.05 per share after rising 10.5% in the last five months.
Interestingly, ENB stock has rewarded its loyal investors with attractive dividends for nearly seven decades and has increased its payout for 29 consecutive years — making it a Dividend Aristocrat. At the current market price, it offers a very attractive 7.6% annualized dividend yield and distributes its dividend payouts every quarter.
Enbridge mainly operates four business segments, including liquids pipelines, energy services, gas distribution, and gas transmission and midstream. Besides these four segments, the company has also started generating a small part of its total revenue from its renewable power generation and transmission segment, which has huge potential to grow in the future.
ENB’s solid financial growth trends
In the last decade, Enbridge has significantly expanded its business, diversified its revenue streams, and focused on operational efficiencies. To give you a rough idea about its financial growth trends, over the 10 years, from 2013 to 2023, ENB’s annual revenue rose nearly 33% from $32.9 billion to $43.6 billion. More importantly, its adjusted annual earnings during these 10 years jumped at a higher pace of 57% from $1.78 per share to $2.79 per share.
ENB has also tried to significantly expand its profitability during this phase through various strategic moves. In 2013, it had an adjusted net profit margin of around 4.4%, which grew to nearly 13.2% by 2023.
Can ENB stock make you super rich in the long run?
Besides its well-established traditional energy infrastructure business, Enbridge has recently increased its focus on expanding its presence in crude oil export and renewable energy segments.
In 2021, the company Enbridge completed the acquisition of one of North America’s top crude oil export facilities in a deal worth around US$3 billion. Similarly, the Canadian energy infrastructure giant has made several renewable power-focused acquisitions in the last few years. These investments are likely to pay off well in the long run and help Enbridge accelerate its financial growth trends.
Moreover, Enbridge has a solid financial base, which will allow it to invest more in the expansion of these two business segments further, making its long-term outlook even brighter. Considering these positive factors, I wouldn’t be surprised if ENB stock yields handsome returns over the long term and continues to pay increasing dividends to investors.
