Want Long-Term Passive Income? Consider this High-Yield Dividend Stock First

想要长期被动收入?首先考这只高收益股息股票
Published on: Oct 29, 2024
Author: Amy Liu

Enbridge (NYSE: ENB) is the kind of stock that dividend investors can buy and comfortably hold for many years. With an enticing dividend yield of around 6.6%, it provides investors with a reliable and substantial stream of passive income to cover daily living expenses. Alternatively, investors can choose to reinvest dividends to increase their returns and grow their positions until they want to access that income stream.

High-yield dividend stocks are often associated with higher risk, and there’s a reason for that—many stocks fall into this category. However, there is no shortage of companies in the market that have consistently provided high yields over the long term. These yields can remain stable or decrease as stock prices rise, benefiting those investors who secure these yields before any potential decline. This is why Enbridge is a top high-yield dividend stock that long-term investors may want to consider now.

Enbridge is one of North America’s premier pipeline operators, managing over 29,000 kilometers of active crude oil pipelines and more than 30,000 kilometers of active natural gas pipelines. In other words, Enbridge transports oil and gas from production areas to where they are needed. Thus, as a major beneficiary of energy independence discussions, there’s arguably no better choice than this stock.

This business model has allowed the company to generate very stable cash flows over a long period of time. This has been largely complemented by the debt repayment and balance sheet strengthening activities of Enbridge’s management team in recent fiscal quarters. Analysts see the company’s stock as a major beneficiary of Trump’s upcoming election as US President (we’ll see).

The Financials Make This Stock a Buy

Of course, this business model still wouldn’t be worth investing in if Enbridge fails to meet earnings expectations. Yes, revenue growth is important (the company’s top line is growing about 5% per year), and Enbridge does have some pricing power.

On the earnings side, Enbridge generated $1.85 billion in revenue in its last fiscal quarter. That’s roughly the same as the company’s revenue a year ago, but that number could increase over time. Additionally, rising energy prices (while bad for consumers) could be a boon to a company like Enbridge. In a sense, there are key risks. But in the long run, this company should benefit from supply outstripping demand, and the stock is a great income pick for those seeking a passive income stream now.

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