Some of the best long-term stocks are those where the long-term potential is largely unnoticed. One such underappreciated stock is Enbridge (TSX:ENB), and here’s why the stock belongs in your portfolio
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Enbridge is underappreciated
Most investors are aware of Enbridge, but few realize just how much the energy infrastructure giant does and how lucrative of an investment the company is.
Enbridge is best known for its pipeline network, and there’s a good reason for that.
The pipeline business, which contains both crude and natural gas elements, comprises the largest and most complex pipeline system on the planet. And that pipeline operation transports massive amounts of both.
In fact, Enbridge transports so much crude and natural gas that the segment makes it one of the most defensive options on the market.
Specifically, Enbridge transports one-third of all North American-produced crude across its network. Turning to natural gas, Enbridge hauls one-fifth of the natural gas needs of the entire U.S. market.
And that’s not even the most impressive part.
Enbridge charges for the use of its pipeline network and not for the price of the commodity being hauled. Irrespective of how volatile oil prices move, Enbridge generates a recurring and stable revenue stream.
Amazingly, that’s not all that this underappreciated stock does.
Enbridge also operates one of the largest renewable energy operations in Canada. The company has invested over $12 billion into the segment over the past two decades to build out its current network.
Today, that renewable energy business comprises 40 facilities across North America and Europe. Those sites include wind, solar and hydro elements, all of which generate a reliable and recurring revenue stream, much like a traditional utility.
Finally, Enbridge also operates a growing natural gas utility business. That segment, which includes seven million customers, generates yet another stable revenue stream that makes this underappreciated stock a must-have investment.
Let’s talk income
One of the primary reasons why investors flock to this underappreciated stock is for its juicy dividend. As of the time of writing, Enbridge’s quarterly dividend pays out an annualized $3.77, boasting an impressive 6.01% yield.
This means that a $35,000 investment in Enbridge (as part of a larger, well-diversified portfolio) would earn an income of just over $2,100.
Keep in mind that investors who aren’t ready to draw on that income yet can choose to reinvest it until needed.
And perhaps best of all, Enbridge has provided annual upticks to that dividend going back three decades without fail.
That fact alone makes this underappreciated stock one of the best dividend options on the market.
Enbridge is an underappreciated stock
As an investment, Enbridge is the complete package. The company offers a well-diversified mix of business segments that generate a healthy income. Enbridge also boasts a massive multi-billion-dollar backlog of new initiatives
Finally, Enbridge boasts one of the best-paying dividends on the market with an impressive three-decade history of annual increases.
In short, Enbridge is an underappreciated stock that, in my opinion, belongs in every well-diversified portfolio.
Buy it, hold it, and watch your future income grow.
