Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
Enbridge (TSX: ENB) used to be a dividend giant, but that’s no longer the case. The outlook for another stock could be much better.
While Enbridge has a lot going for it, including a strong dividend yield and a robust infrastructure network, these potential risks and challenges may prompt some investors to look for other dividend stocks with a more stable and sustainable outlook. In fact, if you’re looking for dividend stocks, there’s another stock that offers both a return and a dividend.
Firstly, the global shift towards renewable energy and fossil fuels could affect the long-term growth prospects of Enbridge. As the world shifts to cleaner energy sources, traditional oil and gas infrastructure companies may face declining demand and revenues. Enbridge carries a significant amount of debt. While the company has managed its debt effectively in the past, high debt levels may also pose a risk, particularly in a rising interest rate environment.
In addition, Enbridge faces a number of regulatory hurdles and legal challenges. As for the dividend itself, Enbridge has a payout ratio of about 135% at the time of writing. This high payout ratio suggests that Enbridge is paying out almost all of its earnings as dividends, leaving little room for reinvestment and no cushion for a recession.
Shares of Brookfield Infrastructure Partners (TSX: BIP) are a solid pick. The company owns and operates a diversified portfolio of high-quality infrastructure assets in North America, South America, Europe and Asia Pacific. The company invests in utilities, transport, energy and data infrastructure. Additionally, many of the company’s assets generate revenue through long-term contracts or regulatory frameworks, ensuring stable and predictable cash flows. In addition, many of the assets are inflation-proof.
BIP Equities also has a proven track record of acquiring and integrating high-quality infrastructure assets. Apart from acquisitions, the company also invests in organic growth projects, including expansion and improvement of existing assets, which can drive future earnings and cash flow growth. As for the dividend, which currently stands at 5.76%, the company has been increasing its dividend, which has grown at an average annual rate of 6-9% over the past decade. Meanwhile shares are up 31% from their 52-week low. In comparison, Ambridge stock is up just 14%. So investors looking for a reliable dividend giant on the TSX should consider BIP.
