Currently, Enbridge pays investors a dividend of $0.738 every quarter, which totals $2.952 for a full year, which is well in excess of its profits and results in a payout ratio of about 120%. Enbridge is an energy generation, distribution, and transportation company that has operations in both the United States and Canada. About Us:Stocktrades.ca was founded in 2016 by investors Daniel Kent and Dylan Callaghan, with the ultimate goal of providing Canadian investors with the best possible tools to increase their investment portfolios. Current Issue This outstanding company has all sorts of things going for it. Charts provided by StockRover. All Instrument Types. We previously reviewed these issues and do not expect them to affect Enbridge's dividend safety profile, even if Line 3 were to be scrapped. Yes. At about 50% of total earnings they’re not enough to cover the dividend alone, but they still offer peace of mind for investors who worry about the oil market. Enbridge has increased its annual dividend each year since 1995. This is not a low risk investment, and if you’re an investor with a quick trigger finger in terms of selling, this may not be for you. Some companies like Pembina Pipe and TC Energy can be had, from strictly a valuation standpoint, for less than Enbridge. Remember, Enbridge has been dealing with a weak energy market for years now, and it has been weathering that storm just fine. Enbridge (TSE:ENB) Dividend & Stock Analysis – Is It Safe? Enbridge’s payout ratio is 124% !!! Or is Enbridge’s dividend on its way to inevitable cut as well? For 2020, it expects DCF to fall within a range of $4.50 and $4.80. Although we do appreciate Enbridge’s growth, as it does allow them to increase cash flows and keep raising the dividend, we understand that this is a company that has more or less hit a plateau, and we don’t expect a crazy amount of share appreciation. Enbridge common shares have a Compound Annual Growth Rate (CAGR) of more than 11% over a 25-year period. A dividend cut will come and the stock will tank. In 2019, Enbridge earned $4.57 per share in distributable income. The company had historically yielded in the high 5% range prior to spiking to the mid 9% range in March. An analysis of Enbridge’s dividend must go a little deeper than just the numbers. Don’t worry; this 7.7% yield isn’t going anywhere. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. Despite a Republican president in the White House, large pipeline projects are still being held up by protesters and the legal system. This outstanding company has all sorts of things going for it. However, did Canadian investors make a huge mistake throwing a blanket outlook over both producers and pipelines? It has a network of crude oil and natural gas pipelines across Canada — assets that can’t be easily replicated today. Please read the Privacy Statement and Terms of Service for more information. So right now Enbridge’s dividend looks safe and secure. Breaking News . Enbridge stock is one that's high on the list of any dividend investor looking for passive income. Around $40/share, this business keeps doing incrementally better. One piece of good news for investors who might be worrying about Enbridge’s dividend is the stability of its natural gas utility and power generation businesses. An investment in Enbridge for its dividend is going to require one to be willing to withstand the inevitable volatility the oil and gas sector is going to bring for the foreseeable future. For every dollar they take in they pay out 1.24$. For most investors this would be cause for concern, however it’s important for a company like Enbridge that we look at both the free and operating cash flow payout ratios. It’s nearly impossible to build new pipelines, especially mega projects that cross provincial lines. It’s flagship asset is the Canadian Mainline system. Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group. However, the ability to grab market-beating returns strictly from the dividend with one of Canada’s largest companies and longest consecutive dividend growers is no doubt appealing. Enbridge’s forward dividend is now $3.24 CAD ($2.43 USD) giving a dividend yield of about 6.0%. At the time of writing, COVID-19 has wreaked havoc on Enbridge’s share price. Canadaâs Top 10 Dividend Stocks for 2021 and Beyond, Canadian Dividend All-Stars â Week of Dec 14, Canadian Oil Stocks â the Best Oil & Pipeline Stocks Today, Canadaâs Best Monthly Dividend Stocks and REITs, PO Box 16018 Lower Mount Royal, Calgary, Alberta, T2T5H7, Canada. © 2020 The Motley Fool Canada, ULC. From 2018 to 2020, Enbridge is planning to spend $22 billion in capital spending. However with it being an industry leader and sporting a huge dividend yield, I’m not surprised investors are willing to pay a premium for the company right now. Motley Fool Returns Stock Advisor S&P 500 The post Is a Dividend Cut Coming for Enbridge (TSX:ENB) Stock? The company delivers more than 3 million barrels of crude oil every single day, equating to about 25% of the crude oil produced in North America. The Motley Fool Canada » Dividend Stocks » Enbridge (TSX:ENB) Dividend: Just How Safe Is This 7.7% Yield? Imagine how hard it’ll be if Donald Trump gets defeated in November. TFSA Investors: 3 Safe Dividend Payers Yielding up to 6.3% Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. The Enbridge stock is a must-buy for investors seeking a growing income stream. In this case, the dividend is still suspect, but it looks much safer than strictly looking at earnings. Considering we are in the midst of a global pandemic that has wreaked havoc on oil prices, this is a strong sign. Payout Ratios Free Webinar: https://bit.ly/3deW1eo Best Renewable Energy Video: https://youtu.be/YKfpGrx6kdo How can Enbridge sustain its dividend payment? The fact they hold positions in securities has had no impact on the production of this article. Enbridge has paid dividends since 1953. Enbridge Inc. (ENB) Dividend Safety metrics. Do I think investors looking solely at the company’s payout ratio in terms of earnings are making a mistake? This is your chance to get in early on what could prove to be very special investment advice. It has raised its dividend, even as oil producers slashed and eliminated theirs. 2021 TFSA Contribution Room: What to Buy With $75,500, Passive-Income Investors: Canadian Banks Are Just Getting Started, 3 Top Canadian Stocks Now Selling at 52-Week Highs, 3 Undervalued TSX Stocks That Can Deliver Superior Returns in 2021, Millennials: How to Save and Invest for Your 1st Home Faster. In an industry plagued with misinformation, our main priority is to maintain complete objectivity and bring investors around the world accurate, timely and high quality investment news and information. All Instrument Types; Indices; Equities; ETFs; Funds; Commodities; Currencies; Crypto; Bonds; Certificates; No results matched your search. Prior to getting started, I’d just like to drop this 5 year performance chart from 3 popular pipelines here in Canada. Currently, Enbridge offers a high forward yield of 8.1%. A safe 8% dividend yield Importantly, Enbridge stock’s attractive valuation also results in an incredible dividend yield of 8.1%. These are some of the best growth streaks and dividend growth rates in the country. Enbridge (NYSE:EMB) has long been one of Canada’s most popular dividend stocks, and it’s easy to see why. The issue is more over the long term, as struggling energy companies simply can’t afford to pay their bills. Its current dividend is $3.24 per share. Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. Nothing is for certain anymore, but I expect Enbridge to continue to sustain and raise its dividend – even during a difficult 2020. Dividend Safety Rating: A Yes. But the fact remains, Enbridge has raised dividends for 2.5 decades and has grown its dividend at a 16% clip annually over the last 5 years. Dan manages his TFSA, RRSPs and a LIRA at Questrade, and has compiled a real estate portfolio of his primary residence and 2 rental properties, all before his 30th birthday. COVID-19 happened, and it is impacting the entire energy sector in a big way. And in 2021, that range is expected to be even higher, between $4.70 and $5.00. Enbridge (TSE:ENB) is one of the more popular options when it comes to Canadian dividend stocks. However, Stocktrades is by no means associated with the Toronto Stock Exchange, or any of the companies we cover. In fact, with most of the high-dividend stocks that cross my desk, I toss them in the proverbial wastebasket. So, is it sustainable?
And of course, auxiliary divisions like power generation and electric transmission lines reported barely a blip in business activity. To compare this to another prominent pipeline company Pembina Pipeline (TSE:PPL), it paid out around 133% of free cashflows towards the dividend in 2019. So, lets get down to the brass tacks and look at the company’s primary attraction, it’s juicy dividend yield. Enbridge's (ENB) shares have been suffering of late due to the perceived weakness of the dividend. … Some people stick to more stable investments, like Canadian financial institutions such as TD Bank (TSE:TD), or RBC (TSE:RY). The current quarterly dividend is CA$0.81 per share, or CA$3.24 per year. Many of Enbridge’s customers are among the best in the sector, but even those companies are hurting today. This article was coproduced with Dividend Sensei and edited by Brad Thomas. Investors are worrying about all the extra inventory out there. The company has pipeline systems that serve both oil sands distribution and natural gas. The dividend is safe when you consider ENB distributable cash flow. Overall, Enbridge’s dividend should be safe. ENB is also 50% in distributing natural gas, and has business in hydrogen gas; ENG will be a key player here. At the time of writing, Enbridge stock trades at $36.25 per share and provides a dividend yield of 9%. Not to alarm you, but you’re about to miss an important event. Market Cap: $78.16 billion Forward P/E: 14.48 Yield: 8.39% Dividend Growth Streak: 24 years Payout Ratio (Earnings): 126.56% Payout Ratio (Free Cash Flows): 89.28% Payout Ratio (Operating Cash Flows): 65.92% 1 Yr Div Growth Rate: 9.99% 5 Yr Div Growth Rate: Premium Members Only Stocktrades Growth Score: Premium Members Only Stocktrades Dividend Safety Score: Premium Members Only. Returns since inception, October 2013. But does that make it a guarantee the company maintains its dividend? Nelson Smith | May 6, 2020 | More on: ENB ENB. For example, pipeline project… The other moat creating advantage is the highly regulated nature of the business. After a busy 2018 in which Enbridge (ENB) rolled up its MLPs to simplify its corporate structure, management delivered some bad news on March 1, 2019, announcing a one-year delay on the firm's $6.8 billion Line 3 … Investing on his own since he was 19 years old, Dan has compiled the experience and knowledge needed to be successful in the world of self-directed investing, and is always happy to bring that knowledge to Stocktrades.ca readers and any other publications that give him the opportunity to write. New projects and price increases will help drive earnings growth, too. A safe healthy company that can keep raising dividends for years has a payout ratio of 75% or less. Yes. There’s no questioning that Enbridge’s stock price is currently in the dirt. I’d argue in the short term, such a scenario doesn’t matter so much. Because of meaningful non … The payout should be safe, given the DCF outlook and the decent growth portfolio. Enbridge stock is offering one of the best dividend yields these days. Enbridge: Dividend Is Safe. Yes, pipelines do have less reliance on the price of oil when compared to say a producer, however these companies still can’t survive in low commodity environments for long. All content on Stocktrades is the views of the individual reporters. Surface analysis. On your next visit, you'll find a shortcut to this page in the main menu . More reading. On a trailing 12 month basis, Enbridge is currently paying out 126% of earnings. appeared first on The Motley Fool Canada. The information on Stocktrades.ca represents the views of the authors and should not be misconstrued as advice. Click to remove it from your list. If we look at Enbridge’s chart in terms of historical dividend yield, we can clearly see where Enbridge’s stock price took a dive. It expects these investments to boost cash flow growth through 2020. This page has been added to your list of favorites. Let’s take a closer look at this payout to see if it’s sustainable. March 22, 2019. Canada Revenue Agency: Do You Need to Repay CERB Money? ISSN : 2393-073X; ijdmsr.editor@gmail.com; Home; About Us; Call For Paper; Paper Submission; Editorial Board; Issue. We should also look at the company’s dividend history. The company also has a number of projects in its developmental pipeline, including multiple offshore wind farms that have the potential to generate 1 gigawatt in gross power capacity. They think Enbridge’s dividend may be at risk. Can Enbridge grow the business and the dividend? No. This year will have a lot of unknowns. It projected distributable cash flow of between $4.50 and $4.80 per share for 2020. Despite the challenges, Enbridge reaffirmed its DCF outlook and expects to generate DCF per share of $4.50 to $4.80 in 2020, which implies its payouts are … There’s just one problem. Junior producers and even some major producers in Suncor’s (TSE:SU) case were slashing dividends at rates we have never witnessed before. Quotes. The mass panic and ultimate selloff of many companies in the oil and gas sector left Canadians who were paying attention with some bargains, Enbridge being one of them. They think Enbridge’s dividend may be at risk. Save time by adding this page to your list of favorites. Enbridge is one of the best ultra-high Super SWAN stocks you can buy today. Enbridge (TSX:ENB)(NYSE:ENB) is paying a dividend yield of around 8%, but investors shouldn't expect it to last. As you know, the lower a stock’s price goes, the higher the yield is if the dividend rate stays the same. The global shutdowns and lower consumer spending has decimated oil demand which has forced companies including Enbridge to postpone and reduce capital expenditure for 2020. Currently, the company is the fifth largest stock by market capitalization in the country, and the fourth highest in terms of companies that currently pay a dividend. That marks 25 consecutive years of dividend increases — a feat that immediately vaults Enbridge into the elite dividend-growth stocks in Canada. Shares are currently trading around the $32 level, which is a far cry from the $40 level we saw at the start of the year. Check out Stockrover Here! Enbridge was also telling investors to expect solid long-term growth before COVID-19 threw markets for a loop. Payout ratio calculation and chart. Do I think investors looking solely at the company’s payout ratio in terms of earnings are making a mistake? I understand I can unsubscribe from these updates at any time. Let’s take a closer look at this payout to see if it’s sustainable. Microsoft says it found malicious software in its systems . This is a significant discount to what it typically has traded at over the last 5 years (20.4) and the company is also trading at a price to book valuation of 1.3, levels at which we’ve never seen a blue-chip stock like Enbridge trade at. Buy during the strong ESG trend Has long owned this, a great Canadian compounder, but the stock has gotten expensive. The company has paid a lucrative dividend for a long time. The company is currently paying out 90% of free cash flows and 65% of operating cash flows towards the dividend. However, further setbacks could slow the company's short-term growth prospects. Finally, investors should also note that Enbridge's stock price is correlated to oil prices, even if its cash flow is not. Enbridge (TSX:ENB)(NYSE:EMB) has long been one of Canada’s most popular dividend stocks, and it’s easy to see why.
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