There’s no shortage of great long-term investments for investors to grab on the market right now. One such stock is Enbridge (TSX: ENB) and here’s a look at five reasons to buy Enbridge today.
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Reason #1 – Enbridge is huge
Most investors are aware of Enbridge in some form or another. Enbridge is best known for its massive pipeline network, which includes both crude and natural gas elements.
That pipeline network is massive. In fact, it’s the largest and most complex system on the planet, hauling massive amounts of crude and natural gas across North America.
It hauls so much that it accounts for nearly one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market. That’s a staggering amount that makes this a must-have inclusion for any investor.
Incredibly, that’s not even the best part.
Enbridge charges for the use of that network, but not based on the volatile price of the commodity being hauled. This means that irrespective of how the price of crude moves on the market, Enbridge will still haul it and generate a solid revenue stream.
Reason #2 – Enbridge is more than pipelines (and it’s very defensive)
One of the most impressive aspects of Enbridge has to be its immense size and reach. Apart from its familiar pipeline business, the energy infrastructure giant boasts several other segments that are equally impressive.
The first segment to note is Enbridge’s renewable energy business. This includes approximately 40 solar, hydro, and wind facilities that are located across North America and Europe. Collectively, these facilities generate enough electricity (2,300 MW net) to power the needs of over 1.1 million homes.
More importantly, they also generate a recurring revenue stream backed by long-term regulated contracts, much like traditional utilities.
Speaking of traditional utilities, Enbridge also operates the largest natural gas utility in North America. That operation serves 7 million customers and provides yet another recurring and stable revenue stream for the company.
This multitude of revenue streams, coupled with the sheer necessity and volume that Enbridge provides makes Enbridge one of the most defensive options on the market.
Reason #3 – Generate a growing, reliable income
One of the main reasons why investors continue to flock to Enbridge is for the tasty dividend the company provides.
As of the time of writing, Enbridge offers investors an insane 6.5% yield, making it one of the best-paying yields on the market. By way of example, let’s consider a $30,000 investment in Enbridge.
For that initial investment, investors can expect to generate an income of just over $1,900. Investors who aren’t ready to draw on that income yet can reinvest it, allowing any eventual income to grow through reinvestments.
Perhaps best of all, prospective investors should note that Enbridge has provided annual upticks to that dividend for three decades without fail. This factor alone is one of the main reasons to buy Enbridge as a buy-and-forget candidate.
There are more reasons to buy Enbridge
No investment, even the most defensive is not without some risk. Fortunately, Enbridge offers investors a perfect mix of growth and income-producing potential that makes it a great fit for all portfolios.
In my opinion, Enbridge is a top stock that should be a core holding in any well-diversified portfolio.
