First of all, let me confess, I love Enbridge, both the company and the stock. Enbridge is one of the best stocks trading on the TSX.
Enbridge stock trades on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE).
Now read the below lines carefully:
Enbridge has paid dividends for over 66 years to its shareholders.
In December 2020, we announced a 3% increase to our dividend per share, increasing the quarterly dividend to $0.835. This translates into a $3.34 dividend per share on an annualized basis for 2021. Over the past 26 years, the dividend has grown at an average compound annual growth rate of 10%.
A couple of key numbers to note in the above paragraphs are: 66 years, 3% increase to the existing dividend yield, yield of $0.835, $3.34 annual, 10% compounded growth rate.
And the bottom line is that Enbridge has constantly been increasing the dividend YOY for the past 26 years straight, at the rate of 10% per year. Isn’t this a dividend beast then?
The sole purpose of this article is to let my readers know how good the ENB stock is and the juicy cash flow it can generate for you over the years. (with practical examples and scenarios).
Enbridge Stock Overview
Before we continue any further, you need to know that Enbridge is a Canadian blue-chip company.
So your funds are safe. However, with stocks or equities, there are risks involved. Blue chips are the safest possible growth instruments you can possibly find. These are stable and growth companies as well.
One thing to note about the ENB (TSX) stock is that the growth of the stock is pretty mediocre and usually the stock trades in a range.
Look at the stock’s chart below for reference: (5-year time frame)
Looking at the chart above, does that mean you have to invest in Enbridge for the dividends alone? It really depends.
But, do note that the stock has descent growth too, it’s just that the entry and exit points need to be taken care of.
What I mean to say is with growth and good dividend stocks such as Apple or Microsoft, your entry point can vary (since the stock will move up eventually, but that’s not the case with Enbridge). The stock usually moves sideways or in a particular range.
But Apple’s dividend percentage is not as juicy as Enbridge is and you’ll also have to pay taxes on the dividends received (unless you buy it in RRSP).
Furthermore, I’ll not dig into the market cap of Enbridge, P/E ratios etc in this post. All of this data is readily available. The purpose of this article is not to bore you but educate the importance of investing in good to best Canadian dividend stocks am aware of.
“Over the decades, Enbridge has delivered superior shareholder value. Our low-risk business model has resulted in strong and consistent growth in the dividend which we are continuing to deliver.”
Why Enbridge when there are many other dividend stocks?
Now, that’s a brilliant question!
Dividend stocks usually pay out cash once every month, 3 months (q), 6 months (semi-a) or annually.
When you compare dividend stocks with >5%, you’ll have a bunch of options in REITs, other sector stocks.
Then, the question again is, why is ENB the best compared to all?
I am not saying ENB is the best compared to every other dividend stock out there.
But for me, it is the best.
Coz, the company has a stellar profile in paying out dividends for the past 50+ years and the dividend’s been growing year after year at a compounded growth rate of 10+%.
Moreover, the company is one of the most well sought and amazing blue-chip Canadian companies with a market cap of close to 90B and good average trading volumes.
Enbridge Stock Dividend History
Let us now look at the stock’s (Enbridge) dividend history and the growth rate.
We have a consistent track record of delivering annual dividend increases, and our continuing goal is to deliver superior shareholder returns through capital appreciation and dividends. – Enbridge
Well, as we know, the dividends of Enbridge have been constantly growing at a compounded rate of 10% per year for the past 25+ years. That’s consistent right.
There’s one thing we can ascertain from this – that the dividends are going to rise in the future (given the track record of the company but need not be.)
Below is the chart of the Enbridge dividend history over the years for your reference:
As you can see from the above chart, Enbridge has always delivered dividends on time and every time. And look at the growth rate too!
Now, consider the below scenario:
You bought 1000 shares of Enbridge in 2015 and kept it from 2015 – 2021 in your TFSA. Here’s how much your dividends would have risen over the years:
Simply put, by just holding the shares of Enbridge for 5+ years, your initial principal amount yields a dividend of $3337 per 1000 shares purchased and held. And since you’re holding it in a TFSA, you’re dividends are tax-free too. That’s some good decent cash flow for you. Right?
What’s more, the stock’s dividend history says it all. Isn’t the dividend growth over the past 5 years alone fantastic to like this beast? The management is extremely positive about increasing the dividends going forward.
To sum it up, Enbridge is an amazing Canadian Blue chip stock with great dividends.
You should definitely consider investing a part of your portfolio in this equity.
You might find companies that can pay you more dividend than what Enbridge does, but with the consistent record that this company has, it’s definitely worth considering and the best in class.
With Enbridge, not only are the dividends great, but the dividends keep rising every year at a compounded rate of 10+%.
Finally, please do not forget to let me know your thoughts and comments below.
Thanks for reading! Have a great day.
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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.