Enbridge Inc. (NYSE:ENB) operates as an energy infrastructure company. The company operates through five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services. The Liquids Pipelines segment operates pipelines and related terminals to transport various grades of crude oil and other liquid hydrocarbons in Canada and the United States. The Gas Transmission and Midstream segment invests in natural gas pipelines and gathering and processing facilities in Canada and the United States. The Gas Distribution and Storage segment is involved in natural gas utility operations serving residential, commercial, and industrial customers in Ontario, as well as natural gas distribution and energy transportation activities in Quebec. The Renewable Power Generation segment operates power generating assets, such as wind, solar, geothermal, and waste heat recovery facilities, and transmission assets in North America and Europe. The Energy Services segment provides energy marketing services to refiners, producers, and other customers, and physical commodity marketing and logistical services in Canada and the United States. The company was formerly known as IPL Energy Inc. and changed its name to Enbridge Inc. in October 1998. Enbridge Inc. was founded in 1949 and is headquartered in Calgary, Canada.
Enbridge has been an outstanding passive income stock over the years. The Canadian pipeline and utility giant has paid dividends to its shareholders for more than 67 years. The company has increased its payout annually for the last 27 consecutive years, growing it at an impressive 10% compound annual rate. The energy infrastructure company currently offers investors an attractive yield of 6.78%.
- Market Cap: 79.068 billion
- PE Ratio: 22.19
- EPS: 1.76
- Dividend Yield: 6.78%
That high-yielding payout is on rock-solid ground. Enbridge’s low-risk pipeline-utility business model generates very stable cash flow backed by long-term contracts and government-regulated rate structures. Meanwhile, it pays out a conservative 60% to 70% of that cash flow to investors via the dividend. That gives it a nice cushion while allowing it to retain earnings to fund expansion projects. The company also has a solid investment-grade balance sheet, giving it additional financial flexibility.
Enbridge has a large backlog of commercially secured expansion projects under construction, which should grow its cash flow per share at a 5% to 7% annual rate through at least 2024. Meanwhile, it has a growing list of projects lined up to fuel growth beyond that time frame. Because of that, it should have no problem continuing to increase its high-yielding dividend.