Despite the turbulent market environment over the years, the Toronto Stock Exchange still hosts several companies that pay and increase dividends. When investing in dividend stocks, it’s important not to focus solely on the dividend yield they offer. For a stock to be a good investment, it must be capable of distributing those dividends consistently over many years.
While the energy sector is no stranger to volatility or even dividend cuts, some companies perform better than others in this regard. Today, we’ll discuss a high-yield Canadian energy stock that pays dividends and has a solid track record of dividend growth: Enbridge (TSX: ENB), a giant in the Canadian energy industry with a market capitalization of CAD 121.85 billion. This multinational energy and pipeline company is headquartered in Calgary and owns and operates pipelines across Canada and the U.S., transporting crude oil, natural gas, and natural gas liquids throughout North America.
Enbridge’s influence in the renewable energy sector is also growing, as it continues to expand its portfolio of onshore and offshore wind power projects. Additionally, the company owns and operates a regulated natural gas utility and is the largest natural gas distribution company in Canada.
As of the time of writing, the trading price of Enbridge stock is CAD 55.96 per share. The company pays investors a quarterly dividend of CAD 0.915 per share, resulting in a dividend yield of up to 6.54%. Enbridge has maintained a record of consistent dividends and growth over the years.
The company has distributed dividends to shareholders for over 70 years, with a compound annual growth rate (CAGR) of approximately 10% over the last three decades.
For income-seeking investors, Enbridge’s high-yield dividend and consistent increases in payouts make it a reliable investment. Even under challenging market conditions, the company has continued to raise its dividends.
Commodity price fluctuations often lead to significant volatility in energy stocks. However, Enbridge stands out due to its business model. Rather than generating revenue based on the prices of underlying commodities, the company earns income based on transportation volumes. This approach shields the company from the impacts of oil and gas price changes. Additionally, Enbridge benefits from long-term contract arrangements, which strengthen cash flow in tough economic conditions.
