North America’s Energy Bridge
This firm is critical to getting
One of the most prudent and effective ways to generate wealth is to collect regular payments over time from battle-tested businesses with solid long-term growth prospects. The statisticians and market researchers back it up: Dividend accumulation is a critical component of total return, providing essential stability during volatile markets.
According to Standard & Poor’s, dividends are responsible for 44 percent of the S&P 500’s total return—the increase in value if all dividends were reinvested—over the last 80 years. During the last decade dividend income accounted for as more than 50 percent of total return.
Establishing a foundation for long-term wealth is not about simply loading up on the highest-yielding stocks you can find. It’s about buying businesses with the proven ability to sustain their payouts over time. Enbridge (TSX: ENB, NYSE: ENB) boasts an enviable record of consistent dividend growth over the long haul. It’s a dominant player in what is an increasingly essential industry, energy infrastructure.
Every portfolio needs ballast, and this Canadian stalwart has proven its utility dayin, day-out. Enbridge has paid a dividend for more than 55 years. The annualized dividend has grown from CAD0.0075 to CAD1.48 per share, an average of 10 percent per year. The payout ratio on a trailing 12-month basis is 59.9 percent, on the low end of management’s target range of 60 to 70 percent of earnings.
Enbridge is
It exports 69 percent of western Canadian oil production, or about 11 percent of the
Enbridge, which reports second-quarter results on July 28, has made a concerted effort in recent years to broaden its portfolio by investing in alternative energy projects. Enbridge, Enbridge Gas Distribution and FuelCell Energy (NSDQ: FCEL) opened what was described as the world’s first direct fuel cell-energy recovery generation power plant to operate in
The company recently announced a USD500 million investment in a 250 megawatt wind energy project in
Sitting just below a recent new high, the shares will likely pull back at some point during what’s likely to be a summer of choppy trading.—David Dittman
Why to Buy
• Consistent dividend growth
• Manageable payout ratio
• Market leader
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