The Dividend Dream: 7 Percent Returns to Fuel Your Income Goals

Do you want an insane 7% yield to fuel your income goals? This stock is really hard to ignore, and right now, its discounted.

| More on:
investment research

Image source: Getty Images

Finding that perfect mix of investments that can provide growth and income for decades is a dream sought after by nearly all investors. Fortunately, the market gives us plenty of opportunities to meet that challenge and fuel your income goals.

Here’s a look at how you can fuel your income goals while keeping your investments on autopilot.

Lock in now and earn income for decades

Does your portfolio include Enbridge (TSX:ENB)? If not, you may be missing out on one of the best ways to fuel your income goals. For those unfamiliar with the stock, Enbridge is one of North America’s largest energy infrastructure stocks.

Enbridge is best known for its lucrative pipeline network, which comprises crude and natural gas segments. The pipeline network is the largest and most complex system on the planet. The segment also provides the bulk of Enbridge’s revenue, which is both recurring and secure.

Part of the reason for that is the sheer volume of crude and natural gas that Enbridge transports each day. Specifically, Enbridge halls nearly one-third of all North American-produced crude. Turning to natural gas, that number is approximately one-fifth of the natural gas needs of the entire U.S. market.

Suffice it to say that makes Enbridge a very defensive investment option to consider. Additionally, that stable and recurring income can help fuel your income goals over the longer term.

But that’s not the only thing that Enbridge is known for.

The other parts of Enbridge

Enbridge also operates a large natural gas utility. Thanks to a series of well-executed acquisitions over the past year, Enbridge’s natural gas utility business is now the largest in North America, with a whopping seven million customers.

And like its pipeline segment, the natural gas business is extremely defensive, generating a recurring and stable revenue stream.

Enbridge also operates a growing renewable energy portfolio. Enbridge has dropped over $9 billion into growing that portfolio over the past two decades. Today, the renewable segment comprises over 40 facilities located across both North America and Europe.

Prospective investors should note one important point here. Renewable energy facilities share a commonality with their fossil fuel-burning peers. Those facilities generate a predictable and recurring revenue stream that is backed by long-term, regulated contracts.

Often, those contracts span decades in duration, providing a healthy revenue stream that allows Enbridge to invest in growth and pay out a very healthy dividend.

And that dividend can fuel your income goals.

Let’s talk about that dividend

Enbridge offers investors a very juicy quarterly dividend. As of the time of writing, that dividend carries a yield of 7.56%, making it one of the better-paying options on the market.

To put that earnings potential into perspective, let’s consider a $40,000 investment in Enbridge (which is always part of a larger, well-diversified portfolio).

For that initial outlay, investors can expect a first-year income of just over $3,030. The reason I say first-year is because Enbridge has an established cadence of providing generous annual bumps to that dividend going back three decades.

Fuel your income goals with Enbridge

There’s one more point to consider: timing. Despite the massive appeal from its multiple business segments, Enbridge’s stock price still trades down by a whopping 16% over the trailing two-year period.

In other words, Enbridge is not only a great stock to fuel your income goals, but it also trades at a significant discount right now.

  • We just revealed five stocks as “best buys” this month … join Stock Advisor Canada to find out if Enbridge made the list!

Enbridge’s dividend, along with its current stock price, make it an appealing option to consider to fuel your income goals. Throw in the defensive appeal from its various segments above, and you have a stellar option for any well-diversified portfolio.

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 Demetris Afxentiou has positions in Enbridge. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

More on Dividend Stocks

hand using ATM
Dividend Stocks

Should Bank of Nova Scotia or Enbridge Stock Be on Your Buy List Today?

These TSX dividend stocks trade way below their 2022 highs. Is one now undervalued?

Read more »

A meter measures energy use.
Dividend Stocks

Here’s Why Canadian Utilities Is a No-Brainer Dividend Stock

Canadian Utilities stock is down 23% in the last year. Even if it wasn’t down, it is a dividend stock…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Got $5,000? Buy and Hold These 3 Value Stocks for Years

These essential and valuable value stocks are the perfect addition to any portfolio, especially if you have $5,000 you want…

Read more »

Growing plant shoots on coins
Dividend Stocks

3 Magnificent Ultra-High-Yield Dividend Stocks That Are Screaming Buys in April

High yield stocks like BCE (TSX:BCE) can add a lot of income to your portfolio.

Read more »

grow money, wealth build
Dividend Stocks

1 Growth Stock Down 24% to Buy Right Now

With this impressive growth stock trading more than 20% off its high, it's the perfect stock to buy right now…

Read more »

Dividend Stocks

What Should Investors Watch in Aecon Stock’s Earnings Report?

Aecon (TSX:ARE) stock has earnings coming out this week, and after disappointing fourth-quarter results, this is what investors should watch.

Read more »

Freight Train
Dividend Stocks

CNR Stock: Can the Top Stock Keep it Up?

CNR (TSX:CNR) stock has had a pretty crazy last few years, but after a strong fourth quarter, can the top…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Dividend Stocks

3 Stocks Ready for Dividend Hikes in 2024

These top TSX dividend stocks should boost their distributions this year.

Read more »