Even during uncertainties plaguing the near future of the stock market, there are great investments in the market to choose from. Some of those can cater to those seeking passive income and solid long-term growth potential. One such example is a stock that I feel has historically been a compelling holding, especially to buy and hold as part of a long-term strategy.
That stock is Enbridge (TSX:ENB). While the energy sector is volatile, I believe that Enbridge is among the safest dividend stocks in the market. Enbridge stock is a staple holding for many investors for its reliable dividends and an excellent track record for dividend growth over time. Besides its attractive dividends, I believe it is also a good holding to consider for investors seeking growth.
Today, I will discuss why this TSX energy stock might be worth buying right now.
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Better alternative to fixed-income securities
When the stock market is volatile, many sensible investors want to prioritize stability over high growth. Fixed-income securities like bonds and Guaranteed Investment Certificates can offer yields of almost 5% right now. Plenty of investors prefer such securities due to the stability of returns more than anything else.
As of this writing, Enbridge stock has a 5.8% dividend yield, which is higher than what bonds and other such securities can offer. Stocks offering dividend yields higher than that typically have the perception of being at a higher underlying risk of dividend cuts.
In March 2025, Enbridge enacted a 3% dividend increase. The decision to hike its payout shows investors that the underlying business has solid financials backing its dividends. The hike contributes to its track record of almost 30 years of dividend growth. I think that it will maintain its track record in the coming years.
A company’s ability to continue sustaining such a dividend-growth streak comes from its financial stability. Enbridge is a massive $140.87 billion market-cap energy company with an extensive energy infrastructure network. It transports hydrocarbons across North America. The company also owns and operates one of the region’s largest natural gas utility businesses. It also has a growing portfolio of renewable energy assets.
Long-term investors have been benefiting from the historical strength of the traditional energy industry. The stable cash flow from its utility segment further cements the confidence that investors have in Enbridge stock. Its growing renewable energy portfolio also eases tensions surrounding the gradual shift away from traditional energy.
Foolish takeaway
A 3% dividend hike is not a lot, but it seems sensible if you consider where the money is being used. Like its peers, Enbridge has high debt levels. Allocating less money to dividend hikes to focus on paying down debt and improving its cash flow profile can ultimately benefit investors in the long run.
The high-yielding dividends alone can make it an attractive investment. However, the stock has plenty of promise to deliver substantial growth through long-term capital gains. As of this writing, Enbridge stock trades for $64.62 per share. Up by 23% from its 52-week low, I think it can be an excellent holding to add to your portfolio at current levels.
