Have you looked at the Enbridge stock price recently? (Ticket symbol TSE: ENB).
Why do I say that you need to buy or accumulate more of the ENB stock right now?
What makes me feel so?
In this article, I’ll try to explain exactly why.
Please do not think this post is a random thought, I have my reasons to make you think about Enbridge as a good investment for the long term.
Let’s get started.
Why You Should Buy The Enbridge Stock Today?
Here’s a quick snapshot of the Enbridge stock as of today.
The above screenshot is the past 1-year trading chart of Enbridge stock. The fundamentals of the company are fantastic. Enbridge is a Canadian Blue Chip.
As you can see from the above screenshot, the stock which was trading at near to 60 levels is down to almost $37.30. That’s dirt cheap.
The second reason, Enbridge is one of the best blue-chip companies in Canada with a fantastic dividend yield of almost 9% which no high-interest account can match even with promotions
If that’s not enough to convince you, then Enbridge has been paying out consistent dividends for the past 65 years.
Here’s a quick note from the Enbridge website about their historic dividend payments:
Enbridge has paid dividends for over 65 years to its shareholders.
This translates into a $3.24 dividend per share on an annualized basis for 2020. Over the past 25 years, the dividend has grown at an average compound annual growth rate of 11%.
Currently, the dividend amounts to $3.24 annually. But, here’s the thing right, you don’t have to wait for one full year to get the dividend payments, you’ll be paid once every 3 months or 4 times a year.
Alright, let’s do some quick math to help you understand better.
Say you have $1000 to park somewhere or to invest.
You have two options:
Leave it in your savings or chequing account and earn at the max 2% interest rate (even with a HISA account)
Or second, Invest in ENB stock.
Option 1 is always there. It’s safe and fine.
Let’s talk a bit more about option 2 here (Investing in Enbridge stock)
So with the $1000 you have, as of today, you can buy:
$1000/37.30 (Enbridge stock price as of today). You’ll end up buying 27 shares of the company.
Right now, each of these 27 shares will pay you $3.24 per share. That is $87.48 CAD per annum.
Now lets divide $87.48/12 (monthly) = $7.29 per month or you’ll get paid $21.87 every 3 months.
So for the $1000 you invest in ENB, you’ll get the dividend of $22 every 3 months.
Few Other things to consider for buying the Enbridge Stock Today
1. First things first, Enbridge has been increasing the dividend percent for the past 65 years straight at an average compounded rate of 11% annually. So the dividend of $3.24 per year (this year) is only for this year.
Next year the dividends will again likely increase. Isn’t that exciting that your money makes even more money with every year that passes by.
2. Remember the growth of the stock as well, if the stock ends up going back to $50 levels, that a massive return of almost 30% on your capital.
3. If you are worried that the stock will still go down, remember, you always invest with these blue chips for the long term, and over the long term, Enbridge is a clear winner. It’s not a penny stock, come on!
4. Try to always buy stocks like ENB on dips (when the stocks price falls, you’ll end buy buying more shares and when the stock is high you still buy the stock but will get less quality, this way you’ll be dollar averaging and end up a winner eventually over time). This also helps you avoid FOMO. Invest the same amount every month and buy on red days. If that helps!
For example – Say for example you have $1000 to invest every month, right. And you want to invest $200 into Enbridge every month. That’s it, you have a plan now, just remember to stay a consistent month on month and I bet you’ll accumulate a lot of wealth over time.
Consistency is the key to success here and create a cash plan with your Banks’ Investment account (I know for sure that CIBC does this) so that your $1000 goes into that account every single month 🙂
Set aside a particular date for your investments to happen and that’s it. Congratulations you’re on the right track.
Enbridge is a fantastic company and a true Canadian blue-chip.
The stock is down right now, but that’s for time being. I am pretty sure the stock will do good over the long term. By long term, I mean a minimum of 5-10 years invested.
Always remember to pick good quality Blue-Chip stocks. When the stocks are cheap with good fundamentals, buy more if possible. At the end of the day, you need to think for the long term to create wealth and avoid getting into penny stocks.
I’m no financial advisor to recommend anything. But, in the best interest possible, I am trying to help people out with what I feel is good to secure your future.
Financial education and where to park your money is very important. You always have to understand what to do with your money. Unless you do so, there’s nothing much you’ll end up having.
Thanks for reading. Let me know your thoughts and comments below.
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Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.