Enbridge, a Canadian energy infrastructure company, has established itself as a dividend aristocrat, offering an impressive combination of long-term dividend growth, secured cash flow, and high yield. This makes it an attractive option for private investors and savers, especially in economically challenging times.
Dividend Growth and Yield
- 30 Years of Dividend Growth: Enbridge has consistently increased its dividends for 30 years, making it one of the most reliable dividend aristocrats.
- High Yield: The stock offers a dividend yield of nearly 6%, which corresponds to an annual payout of 3.77 CAD per share, based on a current share price of about 63.37 Canadian dollars.
- Dividend Structure: Dividends are paid quarterly, with the next payment due on September 1 for shareholders who hold the shares as of August 15.
Secured Cash Flow and Inflation Protection
- Inflation-Protected Cash Flow: Enbridge benefits from a broad portfolio of oil and gas pipelines, gas storage facilities, renewable energies, and utility networks, which make its cash flow inflation-protected.
- Distributable Cash Flow (DCF): The forecast for 2025 is a DCF of 5.50 to 5.90 CAD per share, providing a solid foundation for dividend payments.
Payout Ratio and Sustainability
- Payout Ratio: Despite a frequently cited high payout ratio based on accounting profits, the payout ratio is about 66% when considering the DCF, which is considered sustainable.
- Sustainability: This ratio indicates that Enbridge is capable of securing and continuing to increase its dividends long-term without jeopardizing financial stability.
Importance for Private Investors and Savers
- Stability in Difficult Times: Enbridge provides a stable source of income, which is particularly valuable during economically challenging phases, as it guarantees regular income.
- Long-Term Investment Strategy: The combination of dividend growth and secured cash flow makes Enbridge an attractive option for long-term oriented investors focused on stable returns.