Finding the right mix of investments can make all the difference between retiring comfortably or needing to continue working for a few extra years. Investing in income stocks today can help a portfolio grow enough to support a comfortable retirement. To do that, investors need to pick the right TSX dividend stock.
There’s no shortage of great options on the market that can help meet that goal. One such TSX dividend stock that I hold and plan to continue holding for decades is Enbridge (TSX:ENB).
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Why Enbridge belongs in your portfolio
Most investors are familiar with Enbridge, at least in some way. The company is an energy infrastructure behemoth. The bulk of Enbridge’s revenue stems from its pipeline business. The pipeline and storage business hauls both crude oil and natural gas across Enbridge’s vast network, connecting refineries and storage facilities across the continent.
In fact, Enbridge’s pipeline business is one of the largest and most complex systems on the planet. The sheer volumes involved are staggering. Each day, Enbridge transports one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market.
To say that this makes Enbridge a defensive investment would be an understatement. But that’s not even the best part.
Enbridge charges for use of its vast network, rather than the price of the volatile commodity being hauled. This means that Enbridge generates a stable recurring revenue stream that is backed by long-term regulated contracts, irrespective of which way oil prices move.
And that stable recurring revenue stream allows Enbridge to invest in growth initiatives from its multi-billion-dollar backlog and pay out a quarterly dividend. This fact alone makes Enbridge a superb TSX dividend stock to consider.
Beyond pipelines
Enbridge is predominantly known for its pipeline business, and for good reason. But this TSX dividend stock also offers investors some diversification in the form of its other business segments.
That includes Enbridge’s growing renewable energy business. That business includes over 40 facilities located in Europe and North America. Those facilities, which include solar, wind and geothermal elements, have a net generating capacity of over 4,100 megawatts. That’s enough to meet the energy needs of nearly two million homes.
Those facilities operate like a utility. They generate energy and then sell it in accordance with long-term regulated contracts, which often span decades.
In other words, like the pipeline business, Enbridge’s renewable energy operation generates a recurring and stable revenue stream. These assets also position Enbridge to participate in the long-term shift toward cleaner energy.
Beyond renewables, Enbridge also operates one of the largest natural gas utilities in North America. Like the other segments, the natural gas utility is regulated, generates stable revenue and allows this TSX dividend stock to invest in growth and pay its dividend.
Let’s talk about that dividend
One of the main reasons why investors continue to flock to Enbridge is for the dividend that it offers. Enbridge has been paying dividends to shareholders for over seven decades without fail and has maintained generous annual upticks to that dividend for over three decades.
As of the time of writing, Enbridge offers investors an appetizing quarterly dividend that yields 5.33%. This means that investors who can invest $10,000 into this TSX dividend stock will earn an annual income of over $500.
That’s not enough to retire on, but it is enough to generate more than a half-dozen new shares each year from reinvestments alone. That’s a compounding engine that can have a huge impact on a portfolio over time.
For investors looking at a TSX dividend stock to invest in for the long haul, Enbridge is an option that is hard to ignore.
Will you buy this TSX dividend stock?
Enbridge offers investors the perfect mix of defensive appeal, long-term growth potential and a tasty high yield. While no stock is without risk, the sheer necessity of Enbridge’s business segments makes this TSX dividend stock a must-have for any well-diversified portfolio.
Buy it, hold it, and watch your future income grow.
