There’s no shortage of great investments for both seasoned and new investors alike. Between all those great stocks, there is one single stock that I would love to hold forever in a Tax-Free Savings Account (TFSA).
That stock is Enbridge (TSX:ENB), and here’s why it’s the single stock to hold forever in a TFSA.
Source: Getty Images
Let’s start with an introduction
Enbridge is best known for its lucrative pipeline network, and there’s a good reason for that. The energy infrastructure behemoth hauls a whopping one-third of all North American-produced crude across its network.
But that’s not all. Enbridge’s pipeline network also consists of a natural gas segment, which is responsible for transporting one-fifth of the natural gas needs of the U.S.
Let that sheer volume sink in for a moment.
As defensive as that sounds, there’s another key point to note. Enbridge charges for the use of that network and not by the volatile price of the commodity hauled. In other words, irrespective of which way oil prices go, Enbridge generates a massively reliable (and growing) revenue stream.
Suffice it to say, Enbridge is an incredibly lucrative defensive investment, and that’s just one reason why this is the single stock to hold forever in a TFSA.
Enbridge offers much more
Apart from that pipeline business, Enbridge offers investors other impressive verticals that increase its overall appeal. This includes both a renewable energy segment as well as a natural gas utility business.
The renewable energy business comprises over 35 facilities located across North America and Europe. Those facilities include solar, wind and hydro elements, generating a 3,481-megawatt net capacity. That’s enough to meet the energy of 1.3 million homes and, incredibly, isn’t even the best part.
Renewable energy facilities are bound by long-term regulated contracts that last decades. This provides yet another recurring and stable revenue stream for the company, which leaves plenty of room for Enbridge to invest in growth and pay out a generous dividend (more on that in a moment).
Enbridge has also invested heavily into the segment, dropping nearly $10 billion over the segment over the past two decades.
Turning to the natural gas segment, Enbridge’s gas business is one of the largest utilities in North America, with seven million customers. The segment provides Enbridge with another source of recurring revenue stream that continues to see strong growth.
Again, this helps to make Enbridge the single stock to hold forever in a TFSA.
What about income?
One of the main reasons why investors continue to flock to Enbridge is for its juicy dividend. As of the time of writing, Enbridge offers investors a tasty quarterly dividend that carries a yield of 5.84%. That makes it one of the better-paying dividends on the market.
This means that investors purchasing $25,000 worth of Enbridge can expect to generate an income of just over $1,450 in the first year. I say in the first year because Enbridge has an established precedent of providing investors with an annual healthy bump to that dividend. That tradition has been in place for 30 consecutive years, and Enbridge has no plans to discontinue that cadence.
Should you buy Enbridge as a single stock to hold forever in a TFSA?
Enbridge is the complete package for investors. The company offers a diversified business with defensive appeal, significant growth potential and a juicy dividend.
This makes Enbridge, in my opinion, a stellar stock to hold forever in a TFSA as part of any well-diversified portfolio.
Buy it, hold it, and watch it (and your future income) grow.
