That choice is Enbridge (TSX:ENB), and here’s why it belongs in your portfolio.
Meet Enbridge
Enbridge is one of the largest energy infrastructure companies in the world. The company also operates one of the largest and most complex pipeline networks in the world.
That pipeline network generates the bulk of Enbridge’s revenue and transports both crude oil and natural gas across Canada and the US
In case you’re wondering, Enbridge transports as much as a third of all crude oil produced in North America and a fifth of the natural gas needs of the entire U.S. market across its network.
Another important thing to note is that Enbridge charges for the use of that network, and not based on the volatile price of the goods carried. So regardless of which direction oil prices move, Enbridge generates a stable and recurring revenue stream.
To say this makes Enbridge a top defensive pick would be an understatement. But this incredible Canadian energy resource offers much more.
Beyond Pipelines: Enbridge’s Other Revenue Sources
Beyond its pipeline roots, Enbridge is the Canadian energy stock that offers a diversified foray into other segments of the energy market.
Specifically, Enbridge operates a growing renewable energy business. That company, in which Enbridge has invested more than $12 billion over the past two decades, includes an impressive network of facilities in North America and Europe.
These facilities generate a recurring revenue stream, supported by long-term regulated contracts, much like a utility.
Speaking of utilities, that’s the other segment that Enbridge offers as the Canadian energy stock your portfolio needs.
Enbridge operates one of the largest natural gas companies in North America. This adds another reliable and recurring revenue stream to the mix.
Collectively, these segments provide enough revenue for Enbridge to invest in growth from its multi-billion dollar project portfolio, while paying one of the best dividends in the market.
Let’s talk about dividends
Enbridge offers investors a tasty quarterly dividend. At the time of writing, that return amounts to an impressive 5.8%. This handily makes Enbridge one of the better-paying dividend stocks on the market.
Adding to this appeal is the fact that Enbridge has offered investors annual increases in that dividend without fail, going back three decades.
In other words, Enbridge is the Canadian Energy stocks for long-term investors to buy now and forget about for a decade or more.
Is Enbridge the Canadian energy stock for you?
No stock is without risk, and that includes Enbridge. But where Enbridge sets itself apart from other companies within the energy sector is the sheer breadth of what it has to offer.
Specifically, the company has one of the best defensive positions in the market, focuses on both the oil and renewable energy segments and has achieved three decades of consecutive annual increases.
In short, Enbridge is the stock to own in any well-diversified portfolio.
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