Post-secondary education can get quite expensive, quite quickly. Tuition, books, rent, food—it all adds up really fast, and the costs keep climbing with every passing semester. For parents and grandparents looking at the numbers, the idea of saving enough can feel overwhelming.
But here is the thing about long-term investing: time changes the math. A stock that grows its dividend year after year, held for a decade or two, can turn a modest monthly contribution into something that actually covers a tuition bill.
Enbridge (TSX: ENB) is not a flashy pick. It is not a tech stock that might double in a year. But it is one of the steadiest dividend growers on the TSX, and for a long-term education fund, that kind of reliability matters more than excitement.
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Enbridge
Enbridge moves energy. Its pipeline network spans thousands of kilometres across Canada and the United States, transporting crude oil and natural gas. It also owns a natural gas utility business and a growing renewable power portfolio.
Most of that revenue comes from long-term contracts and regulated assets. That means cash flow is predictable, which is why Enbridge has been able to raise its dividend for 27 consecutive years. The company is not betting on oil prices going up. It gets paid to move product regardless of where prices sit.
The numbers that matter
As of this writing, Enbridge trades near $69.70 per share. The annual dividend is $3.88, which translates to a yield of roughly 5.6%.
That yield alone is attractive. But the growth is what makes it a potential education fund. Management has guided for roughly 5% average annual growth in earnings and distributable cash flow after 2026. If the dividend grows at a similar pace, a position bought today would be paying significantly more income a decade from now.
Here is a rough example: investing $10,000 in Enbridge today would generate about $580 in annual dividends. If the payout grows 5% per year, that same position would pay roughly $945 annually after 10 years. After 18 years—long enough to raise a child from birth to university—it would pay over $1,300 per year. Reinvest those dividends along the way, and the numbers get considerably larger.
Why it works for education savings
A Tax-Free Savings Account (TFSA) is an ideal home for this kind of investment. Dividends and capital gains inside a TFSA are not taxed, and withdrawals are tax-free. That means every dollar the investment earns can go straight toward tuition, books, or residence fees.
The strategy is simple: buy a reliable dividend stock, reinvest the dividends, and let it compound. Enbridge is not the only stock that can do this, but its combination of a high starting yield and a long track record of increases makes it one of the better candidates.
The risks worth understanding
Enbridge, as with most energy stocks, is not risk-free. Its business is tied to energy infrastructure, and regulatory changes or a shift in energy policy could affect operations. The company also carries debt, which becomes more expensive to service if interest rates rise.
And while the dividend has grown for decades, there are no guarantees it will keep growing at the same pace. A severe economic downturn or a major shift in energy demand could slow things down.
But those risks are part of why the yield is 5.8% and not 2%. Investors are being paid to accept them.
Foolish takeaway
Saving for a child’s education does not have to mean parking cash in a savings account that earns almost nothing. It can mean owning a piece of essential infrastructure that pays you every quarter and raises that payment year after year.
Enbridge will not make anyone rich overnight. But for parents who start early and stay patient, a position like this could quietly grow into something that covers a significant chunk of the tuition bill. And that, for most families, is the whole point.
