Luckily, there’s no shortage of great options on the market to help create that passive income stream.
One such excellent option that investors can consider now is Enbridge (TSX:ENB). Here’s why Enbridge is the stock to build that passive income stream and how you can generate as much as $580 every year.
Get to know Enbridge (and all its components)
Enbridge is an energy infrastructure behemoth. In fact, it is one of the largest in the world. The company is best known for its pipeline business, which generates the majority of its revenue.
The pipeline operation is operated as a toll road. It itself generates a passive income stream through long-term supply contracts that maintain the flow of oil and natural gas. The amounts raised are, in a word, enormous.
Specifically, Enbridge transports one-third of all crude oil produced in North America. The company also supplies one-fifth of the natural gas needs of the entire US market. This puts Enbridge in unique company as an incredibly defensive choice for any portfolio.
But that’s not all.
Enbridge’s defensive appeal extends to both its natural gas business and its renewable energy business. Both generate recurring revenue streams supported by long-term contracts. And both serve unique purposes that diversify beyond the core pipeline business.
The renewable energy activities include approximately 40 facilities across Europe and North America. These facilities include solar, geothermal and wind facilities, adding to its already defensive appeal. The segment continues to grow, with Enbridge investing more than $12 billion over the past two decades.
As for the natural gas company, Enbridge’s operations there are equally impressive. Thanks to a trio of acquisitions in recent years, Enbridge’s natural gas business is now the largest in terms of customer base on the continent, with 7.1 million customers.
Again, that’s tied to long-term, regulated contracts, which provide a recurring revenue stream that allows Enbridge to invest in growth and pay out that juicy dividend. That dividend makes that passive income stream possible.
Let’s talk about income
One of Enbridge’s main draws is its quarterly dividend. The company has been paying dividends for over seven decades, making it an impressive and stable payer.
What contributes to that appeal is growth. Enbridge has an impressive three decades of consecutive annual dividend increases under its belt, and plans to continue this trend.
At the time of writing, the company offers an impressive yield of 5.83%.
This means that a $10,000 investment in Enbridge will give investors 150 shares of the energy infrastructure giant. At $3.88 per share (thanks to the recent increase), that equates to $582 in dividends.
Potential investors should keep two important points in mind.
First, investors who aren’t ready to tap into that income can choose to reinvest it. In case you’re wondering, $582 can buy you more than eight shares every year just through reinvestments.
That brings me to the second point.
As I noted above, Enbridge’s current 30+ year streak will continue. This means that investors can expect revenues to continue to grow every year.
Enbridge: Passive Income and More
As an investment, Enbridge is the complete package. Yes, it can provide a growing source of passive income, backed by a recurring income stream. But potential investors should always look further to see the full picture.
From that picture, Enbridge is a solid defensive pick that invests in growth, diversifies beyond its core niche, and pays one of the best dividends in the market.
For any investor looking for passive income with a good night’s sleep, there are few options right now as attractive as Enbridge.
#Invest #dividend #stock #passive #income