Some of the best stocks to hold are those which can withstand different market cycles without worry. And while there’s no shortage of great picks to choose from on the market, there is one Canadian stock that I would absolutely refuse to sell.
That Canadian stock is Enbridge (TSX: ENB) and here’s why it should be a core part of your portfolio, just like it is in mine.
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Why Enbridge stands out as a superb pick
There are few, if any, companies that are as well-known as Enbridge. Enbridge is one of the largest energy infrastructure companies on the planet. The company is best known for its lucrative pipeline business, which transports massive amounts of crude and natural gas each day.
In fact, Enbridge hauls so much crude and natural gas that it makes the company one of the most defensive picks on the market. Specifically, Enbridge transports one-third of all North American-produced crude and one-fifth of the natural gas needs of the U.S. market.
And that’s not even the best part.
Enbridge charges for use of that impressive network, often through long-term contracts. This means that irrespective of which way oil prices move, Enbridge keeps generating a predictable stream of revenue.
That level of stability is rare on the market, let alone from the energy sector.
Beyond its lucrative pipeline business, Enbridge also boasts two other impressive segments that make it a great Canadian stock to own.
That includes both a renewable energy business and a natural gas utility. Both provide a recurring and stable revenue stream backed by regulated contracts that span decades.
The renewable energy business includes over 40 facilities located across North America and Europe. Those facilities include wind, geothermal and solar assets. Collectively, those assets generate enough electricity to power the needs of 1.9 million homes.
The natural gas utility offers equally impressive appeal. Enbridge operates the largest natural gas utility by customer count on the continent. The utility boasts over seven million customers spread across markets in the U.S. and Canada.
Why Enbridge keeps me invested for the long term
Like most investors, one of the reasons why I’m drawn to stay invested in Enbridge is not for its superb business segments (which are great), but for its dividend.
Enbridge has been paying out dividends for over seven decades without fail. Over the past three decades, the company has provided investors with generous annual upticks to that dividend.
This not only makes it one of, if not the only Canadian stock I won’t ever sell, but one that offers a certain comfort around owning.
As of the time of writing, Enbridge’s dividend works out to an attractive 5.20%. This means that investors who can drop $5,000 into the stock will begin to generate several new shares each year from reinvestments alone.
In other words, this is a Canadian stock you can buy and forget about for a decade.
For investors looking at a stock that can pay a handsome yield that’s backed by a solid defensive business with decades of experience, Enbridge is hard to beat.
How Enbridge’s growth strategy strengthens its future
Beyond the dividend and its defensive business units, Enbridge also offers investors an opportunity for growth.
Not only is Enbridge’s cash flow supported by its current regulated and contracted assets, but the company also offers a project backlog that’s measured in the billions.
Those projects span multiple areas, including pipeline expansions, natural gas infrastructure, and renewable energy initiatives. The diversification helps Enbridge to strengthen its position in a changing energy landscape.
In short, Enbridge shouldn’t be viewed merely as just another Canadian stock that pays a good dividend. The company is actively growing its already impressive portfolio.
And that makes this a Canadian stock worth holding for the long term.
This is one Canadian stock I won’t sell
No stock is without risk, and that includes an otherwise defensive titan like Enbridge. Fortunately, Enbridge’s massive defensive moat, diversified operations and stellar history of paying dividends minimize much of that risk.
In my opinion, Enbridge is the perfect Canadian stock to own in any well-diversified portfolio. I’m not selling it, and neither should you.
