Every so often, there emerges a superb TSX stock that investors can buy and hold for decades. Often, these stocks can provide a juicy yield, stellar growth potential, or in some cases, both.
One TSX stock that fits the bill is Enbridge (TSX:ENB), and here’s why I’m still buying the stock and plan to hold it for decades.
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An intro to Enbridge
Most Canadian investors are aware of Enbridge in some form. The energy infrastructure giant is best known for its sprawling pipeline network, and there’s a good reason for that.
That’s because Enbridge operates the largest and most complex pipeline network on the planet, which includes both crude and natural gas elements. Each day, Enbridge hauls massive amounts of both.
In fact, Enbridge hauls so much that the company is seen as one of the most defensive stocks on the market. Specifically, Enbridge hauls nearly a third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market across its network.
Incredibly, there’s another defensive twist to that pipeline business. Enbridge does not charge for use of its network based on the price of the commodity hauled. This means that irrespective of how volatile oil prices are, Enbridge still charges for the use of its network, generating massive amounts of revenue.
It’s that revenue which allows Enbridge to invest in growth and pay out a handsome dividend (more on that in a bit). This makes Enbridge a TSX stock must-have for investors everywhere.
The many other parts of Enbridge
The pipeline segment may generate the bulk of Enbridge’s revenue, but it’s not the only part of the company. This TSX stock also operates a growing renewable energy portfolio.
That portfolio comprises 40 facilities located across Europe and North America that generate a reliable revenue stream backed by regulated contracts. Those facilities include solar, wind and hydro elements, and Enbridge has invested over $10 billion in the segment over the past two decades.
Enbridge also operates a natural gas utility business. More specifically, Enbridge operates the largest natural gas utility in North America, which boasts seven million customers in Canada and the U.S.
This provides yet another recurring defensive revenue stream for the company, which allows it to invest in growth initiatives and pay a generous dividend.
Speaking of dividends…
One of the main reasons why investors continue to flock to Enbridge is for the quarterly dividend it offers. As of the time of writing, this TSX stock boasts an insane 6.67% yield, making it one of the best-paying dividends on the market.
It also means that investors who can drop $40,000 into Enbridge (as part of a much larger, diversified portfolio) can expect to earn an income of approximately $2650.
That’s not even the best part.
Enbridge has an established cadence of providing annual bumps to that dividend going back three decades. This means that investors should see Enbridge as a TSX stock they can buy and forget about for decades.
Investors who aren’t ready to draw on that income yet can choose to reinvest those dividends, allowing the nest egg to grow further.
The TSX stock for any portfolio
Enbridge is one TSX stock of only a handful that provides everything. The company manages to offer defensive appeal, reliable revenue streams, strong growth potential, and a juicy dividend in one package.
In my opinion, Enbridge should be a core holding in any well-diversified portfolio.
Buy it, hold it, and watch your portfolio (and income) grow.
