Enbridge (TSX:ENB) stands as a stalwart in the portfolios of many Canadian dividend investors, and for good reason.
The company operates extensive oil and natural gas pipelines with long-term contracts that generate steady cash flows. This business model provides a degree of insulation from the often volatile swings in energy prices.
As of June 4, this stability also supports a substantial forward annual dividend yield of 7.37%, much higher than the overall TSX’s average.
But if you’re considering adding Enbridge to your investment mix primarily for its dividend appeal, there are important details you should be aware of. Here’s what you need to know about Enbridge’s dividends for this year.
How much is Enbridge paying per share?
For the first quarter (Q1) and Q2 of 2024, Enbridge declared and paid dividends of $0.915 per share. If this trend continues, we can expect the dividends for Q3 and Q4 to remain consistent at the same amount.
In Q4 of 2023, Enbridge paid a dividend of $0.8875 per share. This means that this year’s quarterly payments represent a 3.1% increase from the previous year.
Historically, Enbridge has grown its dividend over the past 29 years at an average compound annual growth rate of 10%. In total, the company has paid dividends for over 69 years.
How do I get the dividend?
To receive the Q3 dividend from Enbridge, you need to own the stock before and hold it through the ex-dividend date.
Historically, the ex-dividend date was one business day before the record date. However, with markets now operating under T+1 (trade plus one day) settlement, the ex-dividend date has shifted to coincide directly with the record date.
For the upcoming Q3 dividend, the critical date to mark on your calendar is August 15, 2024. This is the date by which you must be on the company’s books as a shareholder to qualify for the dividend.
Now, the actual payment of the dividend is scheduled for September 1, 2024. Keep in mind, depending on your brokerage, there might be a delay of a day or two in the funds appearing in your account.
What should you do with the dividend?
What you decide to do with your dividends from Enbridge depends largely on your investment objectives.
If you’re using your investment portfolio to generate income, particularly in retirement, then withdrawing the dividends could be a smart move. This is especially appealing if your shares are held in a Tax-Free Savings Account (TFSA).
However, if your focus is on long-term growth, reinvesting the dividends back into more shares of Enbridge can be a wise strategy. This approach harnesses the power of compounding, allowing your investment to grow more over time.
If available, setting up a dividend-reinvestment plan (DRIP) with your broker can automate this process. With a DRIP, the dividends you receive are automatically used to purchase additional shares of the stock, often at no additional commission.
This can be an efficient way to increase your holdings and enhance your portfolio’s potential returns without any active effort on your part.
