Have you invested in Enbridge (TSX: ENB)? The energy infrastructure giant makes a compelling case for would-be investors with plenty of reasons to buy Enbridge stock.
Here’s a look at some reasons to buy this superb stock right now.
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Let’s start with the dividend
One of the main reasons to buy Enbridge comes down to its dividend. In fact, that’s one of the primary reasons why investors continue to flock to the stock.
Enbridge offers investors a tasty quarterly dividend that pays a respectable 5.9% yield. Not only is that yield well-covered and growing, but it’s also one of the best dividend stocks on the market.
Adding to that appeal, prospective investors should note that Enbridge has provided annual upticks to that dividend for three consecutive decades without fail. The company also plans to continue that tradition, making this a key investment for any portfolio.
To put that earnings potential into context, let’s consider buying $35,000 worth of Enbridge. For that initial investment (as part of a larger, well-diversified portfolio), investors can expect to earn a first-year income of over $2,000.
More importantly, this means that investors who aren’t ready to draw on that income yet can opt to reinvest those dividends until needed. This allows any eventual income to grow on its own over a longer period.
Enbridge’s core business
Enbridge is best known for its lucrative pipeline business, and there’s a good reason for that. Apart from generating the bulk of Enbridge’s revenue, the segment (which includes both crude and natural gas elements) is one of the most defensive options on the market.
That’s due to the sheer volume hauled across its vast network. More specifically, Enbridge hauls one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market.
That fact alone provides more than a few reasons to buy Enbridge right now.
Adding to that defensive appeal is the fact that Enbridge doesn’t charge for use of that network based on the price of the commodity hauled. In other words, the pipeline business operates like a toll network, generating a reliable revenue stream for Enbridge irrespective of how the price of oil moves.
And incredibly, that’s not all Enbridge offers investors.
Enbridge does more than you think
As impressive as Enbridge’s core pipeline business is, the company also does much more. Enbridge also operates a growing renewable energy business, as well as the largest natural gas utility on the continent.
In terms of renewables, Enbridge’s portfolio comprises three dozen facilities located across North America and Europe. Those facilities include solar, wind and hydro elements, all of which are subject to long-term regulated contracts.
Those contracts provide a reliable revenue stream to Enbridge, which allows the company to both invest in growth and help pay that juicy yield.
The same could be said for Enbridge’s natural gas business. Enbridge boasts 7 million customers from that defensive business. Part of the reason for that growth can be traced back to a series of acquisitions over the last year.
There are more reasons to buy Enbridge!
No stock, even the most defensive is without some risk. Fortunately, Enbridge offers multiple diversified revenue streams, plenty of growth potential, and a very tasty dividend. Throw in the insane defensive appeal on the stock, and you have many reasons to buy this energy infrastructure giant.
In my opinion, Enbridge is one of the best long-term options to include in any well-diversified portfolio.
Buy it, hold it, and watch it (and your income) grow!
