Enbridge is a great income stock. If you’re looking to stash away some cash for at least five years, consider picking up some shares for a juicy yield of about 6.3%. This is way better than the interest income provided by GICs or CDs.
A dividend growth streak of 24 years with a three-year dividend growth rate of 11.7% puts Enbridge at the top of the list for safe dividends. Although the leading North American energy infrastructure company will experience slower growth compared to the last 20 years, it will still make a decent investment with its big yield and stable growth profile.
Enbridge anticipates growing its distributable cash flow by 5-7% over the next few years. So, it’s logical to anticipate dividend growth of about 5% per year in the foreseeable future.
The difference from Enbridge common stock and GICs or CDs, of course, is that Enbridge comes with greater volatility. That’s why investors must have a long-term investment horizon if they’re considering Enbridge. The yield on cost can grow to 8% in five years assuming a 5% dividend growth rate!
Contributors at Motley Fool Canada (including myself) cooked up a list of 15 top stocks for December 2019. Actually, I had trouble choosing my top idea for this month as the market kept grinding higher. I chose Enbridge (TSX:ENB)(NYSE:ENB), a defensive name that’s fairly valued with a high dividend yield and a proven track record of dividend growth.
I’ll comment on some of my colleagues’ picks.
Another Solid Energy Dividend Payer
Two contributors picked TC Energy (TSX:TRP)(NYSE:TRP), a smaller peer of Enbridge in the energy infrastructure space. TC Energy is a quality dividend name also but Enbridge offers a bigger yield right off — 5.87% versus TC Energy’s 4.48%, which is just a little more defensive should a market correction happen soon.
The Renewable Energy Space
Two contributors chose a stock in the renewable energy space: Innergex Renewable Energy (TSX:INE) and TransAlta Renewables (TSX:RNW). Clean and renewable energy is a good space to be in as it has secular growth, but I don’t have a strong opinion about these two names in particular.
Given the run-up in utilities in general lately, I think it’s best for investors to consider the space when it’s out of favour again.