Some investments are just too hard to ignore. One stock in particular can only be classified as a must-buy for long-term investors right now.
That must-buy for long-term investors is Enbridge (TSX:ENB), and here’s why it belongs in your portfolio
Source: Getty Images
Meet Enbridge
Enbridge is an energy infrastructure behemoth. The company is best known for its impressive pipeline network, which includes both crude and natural gas segments.
That pipeline network is the first reason why Enbridge is a must-buy for long-term investors.
Enbridge’s pipeline is the largest and most complex system on the planet. Across both its segments, the company transports massive amounts of crude and natural gas each day.
In fact, Enbridge hauls so much that it has made it one of the most defensive stocks on the market.
In case you’re wondering about the volume, 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.
Incredibly, despite that massive defensive appeal, there’s more to Enbridge than pipelines, which leads us to the second reason why Enbridge is a must-buy for long-term investors.
Enbridge does much more than just pipelines
Enbridge may be best known for that impressive pipeline network, but the company does much more. That includes both a renewable energy portfolio and a growing natural gas utility business.
Enbridge has invested heavily in the renewable energy sector over the years. Specifically, over the past two decades, Enbridge has invested $12 billion into the segment.
Today, the renewable energy business comprises 37 facilities located across North America and Europe. Those facilities include solar, wind, hydro, and geothermal energy.
More importantly, those facilities generate a reliable revenue stream that is covered by long-term regulated contracts, much like a traditional utility.
Speaking of utilities, Enbridge also operates the largest natural gas utility in North America by volume. This, too, is reliant on regulated contracts, generating a predictable revenue stream that leaves room for both growth and a juicy dividend.
That dividend represents the third reason why Enbridge remains a must-buy for long-term Investors
Reason #3: Did someone say dividends?
One of the main reasons why investors continue to flock to Enbridge, and why it’s a must-buy for long-term investors, is for its dividend.
Enbridge offers investors a tasty quarterly dividend. As of the time of writing, the stock offers a 5.9% yield, making it one of the better-paying dividends on the market.
To put that income-earning potential into context, let’s consider a $25,000 position in Enbridge. For that initial outlay (which should be part of a larger, well-diversified portfolio), investors can expect a first-year income of just shy of $1,500.
There are two reasons why I referred to that as ‘first-year income’.
First, Enbridge has an established cadence of providing generous annual upticks to that dividend. In fact, Enbridge’s history of annual bumps extends three consecutive decades without fail.
That fact alone makes this a must-buy for long-term investors, but there’s still more.
Investors who aren’t ready to draw on that income yet can choose to reinvest those dividends. This will allow any eventual income to continue growing on its own.
Final thoughts on Enbridge as a must-buy for long-term investors
Enbridge is a stock that offers investors the full package. It has a reliable, well-diversified revenue stream, plenty of long-term growth potential, and a massive defensive moat.
Throw in a growing juicy yield with three decades of increases, and you have an investment that is too hard to ignore.
In my opinion, Enbridge is a must-buy for long-term investors and should be a core holding in any long-term portfolio.
