The market volatility that we’re seeing this month is showing no signs of slowing down. This presents a unique opportunity for investors to purchase stocks at a discount. One such opportunity to consider is Enbridge (TSX: ENB), and here’s why I’m considering Enbridge stock this month as an addition to my portfolio.
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Reason #1: Enbridge has defensive appeal
Enbridge is best known for its incredibly defensive and massive pipeline network. That pipeline network, which comprises both crude and natural gas elements, connects refineries and production facilities across North America.
Enbridge transports massive amounts of both every day. So much so that the company is often regarded as one of the most defensive options on the market.
To put that defensive capability into context, Enbridge transports one-third of all North American-produced crude and one-fifth of the natural gas needs of the entire U.S. market.
To say that this makes Enbridge a defensive option for any portfolio would be a gross understatement. In short, Enbridge’s defensive appeal is one of the key reasons why I’m considering Enbridge stock right now.
Reason #2: Diversified revenue stream
As impressive as Enbridge’s pipeline network is, the energy infrastructure behemoth offers investors much more. Few investors may realize this, but Enbridge also boasts several other defensive revenue-producing streams.
This includes both a natural gas utility and a renewable energy business.
The renewable energy business, in particular, is a key reason why I’m considering Enbridge stock. The company has invested billions into the segment over the past two decades, allowing it to grow into a sizeable network of facilities.
Today, Enbridge boasts a network of over 40 facilities located across Europe and North America. Those facilities include solar, hydro, and wind elements, and provide a recurring and stable source of revenue, not unlike a stable utility stock.
Speaking of utilities, Enbridge’s other business is also worth mentioning. The natural gas utility serves 7 million customers in North America and is one of the largest natural gas utilities.
Like other utilities, the natural gas business generates a stable and recurring revenue stream that leaves room for growth and allows Enbridge to payout a very handsome dividend.
Reason #3: That juicy dividend
Perhaps the main reason why investors continue to flock to Enbridge and why I’m considering Enbridge stock is that dividend.
Enbridge offers investors a quarterly dividend which, as of the time of writing, works out to an impressive 6.1% yield. This makes it one of the better-paying dividend stocks on the market.
It also means that a $5000 investment in Enbridge today will generate an annual income of just over $300.
That’s not enough to retire on, but it is enough to generate more than a few shares through reinvestments, allowing any eventual income to grow on its own.
Another key point to note is that Enbridge has provided investors with generous annual upticks to that dividend for over three decades without fail. Enbridge also plans to continue that cadence over the next several years.
That future income potential is reason enough why I’m considering Enbridge stock to augment my long-term portfolio.
I’m considering Enbridge: What about you?
One of the many lessons reinforced by recent market volatility is that no stock is without risk. Fortunately, Enbridge’s diversified business and defensive nature minimize that overall risk.
Throw in a juicy growing dividend and a booming renewable energy business and Enbridge emerges as one of the best long-term options for income and growth-seeking investors anywhere.
In my opinion, Enbridge should be a core holding and any well-diversified portfolio.
