The most versatile and in-depth investment platform in Canada is just a click of a button away, Disclaimer: The writer of this article may have positions in the securities mentioned in this article. There’s just one problem. Do I think investors looking solely at the company’s payout ratio in terms of earnings are making a mistake? A quick look at the numbers tells us investors who rely on Enbridge’s dividend for income don’t have much to worry about. Hard to walk away from this. The Motley Fool owns shares of and recommends Enbridge. 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 … An analysis of Enbridge’s dividend must go a little deeper than just the numbers. Nowadays, it’s rare to find a big distribution yield and a high degree of safety. Search website for: Popular News. So right now Enbridge’s dividend looks safe and secure. Stocktrades offers strictly investment opinions, not investment advice. In 2019, Enbridge earned $4.57 per share in distributable income. This article was coproduced with Dividend Sensei and edited by Brad Thomas. That said, the demand for oil and natural gas has not just declined but fallen off a cliff amid the pandemic. Enbridge has increased its annual dividend each year since 1995. Surface analysis. It expects these investments to boost cash flow growth through 2020. 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 payout is solid and can easily survive a few months of uncertainty. This means that large players like Enbridge, with vast access to low-cost capital, have a major advantage over smaller rivals. It is important to seek out a qualified investment, tax or legal professional before making any decisions related to your own personal investments. 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%. Overall, Enbridge’s dividend should be safe. It’s nearly impossible to build new pipelines, especially mega projects that cross provincial lines. Enbridge (TSE:ENB) is one of the more popular options when it comes to Canadian dividend stocks. Is Enbridge (TSX:ENB) a Better Dividend Stock Than Toronto-Dominion Bank (TSX:TD)? These earnings should be stable no matter what happens to the underlying energy market. We should also look at the company’s dividend history. It projected distributable cash flow of between $4.50 and $4.80 per share for 2020. The oil and gas industry is expected to struggle, and although we’re seeing Enbridge trade at valuations we haven’t witnessed in some time, we’re also seeing the company post historically low numbers in terms of return on equity and net margins on a trailing 12 month basis. 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. Finally, investors should also note that Enbridge's stock price is correlated to oil prices, even if its cash flow is not. We’ll get to valuation shortly, but I wanted to highlight that as it is a primary factor for the company sporting a 8.39% dividend yield, which most would deem unsustainable. Microsoft says it found malicious software in its systems . Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. Meanwhile, it paid $6 billion in dividends in 2019. On a trailing 12 month basis, Enbridge is currently paying out 126% of earnings. This outstanding company has all sorts of things going for it. That marks 25 consecutive years of dividend increases — a feat that immediately vaults Enbridge into the elite dividend-growth stocks in Canada. In fact, the company recently announced in June 2020 that it would be moving forward with its Fecamp project, which is expected to add 500 megawatts of capacity and a 20 year fixed-price contract. The current quarterly dividend is CA$0.81 per share, or CA$3.24 per year. Passive Income: 3 Stocks That Have Raised Dividends for Over 25 Years. Canada Revenue Agency: Do You Need to Repay CERB Money? They think Enbridge’s dividend may be at risk. The dividend is safe when you consider ENB distributable cash flow. A cash dividend payment of $0.603 per share is scheduled to be paid on September 01, 2020. The fact they hold positions in securities has had no impact on the production of this article. First, it’s highly capital intensive, with major projects often costing billions of dollars to complete. 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. Yes. Its current dividend is $3.24 per share. Enbridge’s payout ratio is 124% !!! That’s also great news for companies like Enbridge that own a lot of assets in the U.S. And then there’s Enbridge’s gas utility business, which provides natural gas for some 3.8 million customers in Ontario and Quebec. Dividends and Common Shares. More reading. Enbridge (TSX:ENB)(NYSE:ENB) is paying a dividend yield of around 8%, but investors shouldn't expect it to last. From 2018 to 2020, Enbridge is planning to spend $22 billion in capital spending. Enbridge (NYSE:EMB) has long been one of Canada’s most popular dividend stocks, and it’s easy to see why. On a whole, Enbridge is one of the more expensive pipeline companies in the country. This is more than triple the S&P 500’s average of ~1.9%, which seems to make it a good option for those seeking a high yield stock for income. Many of Enbridge’s customers are among the best in the sector, but even those companies are hurting today. Enbridge is one of the best ultra-high Super SWAN stocks you can buy today. That bodes well for the company’s existing infrastructure. So, is it sustainable? 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. Furthermore, if you’re not willing to accept the fact that although unlikely, a dividend cut would inevitably cause significant losses in capital due to the share price dropping, Enbridge is probably not for you. Around $40/share, this business keeps doing incrementally better. Dan is primarily a researcher and writer here at Stocktrades.ca, and his pieces have numerous mentions on the Globe and Mail, Forbes, Winnipeg Free Press, and other high authority financial websites. There’s two ways to look at this. The information on Stocktrades.ca represents the views of the authors and should not be misconstrued as advice. 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. We believe, though, that dividend viability fears are over-exaggerated. 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. 7 Small-Cap Canadian Stocks To Buy In 2020, The 5 Best Canadian Bank Stocks to Buy Now. All rights reserved. Or is Enbridge’s dividend on its way to inevitable cut as well? And in 2021, that range is expected to be even higher, between $4.70 and $5.00. Please read the Privacy Statement and Terms of Service for more information. As specialists in … For dividend investors seeking out a high-yield in the out-of-favor energy space, Enbridge looks like a pretty good option today. Currently, Enbridge offers a high forward yield of 8.1%. Enbridge’s forward dividend is now $3.24 CAD ($2.43 USD) giving a dividend yield of about 6.0%. 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. They see a high payout ratio and assume the dividend is close to being cut. Yes. If there’s one thing I’ve come to learn, especially in 2020, it’s to expect the unexpected. The midstream industry is one that enjoys numerous competitive advantages for several reasons. But Enbridge believes the dividend is safe and projects that its distributable cash flow (DCF) will continue to grow at a rate between 5% and 7% over the long term. Reviewing Enbridge's Dividend Safety After Major Project Delay. Buy during the strong ESG trend Has long owned this, a great Canadian compounder, but the stock has gotten expensive. These are some of the best growth streaks and dividend growth rates in the country. 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. DISCLAIMER:Stocktrades is an independent media portal covering the development related to stocks on the TSX. 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. Junior producers and even some major producers in Suncor’s (TSE:SU) case were slashing dividends at rates we have never witnessed before. Remember, Enbridge has been dealing with a weak energy market for years now, and it has been weathering that storm just fine. 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 All content on Stocktrades is the views of the individual reporters. While its dividend is appealing today and the company is still producing strong results today, I wouldn’t rely on its dividend for the long term given all the uncertainty that exists today, especially considering the size of the payments that Enbridge is making. As you know, the lower a stock’s price goes, the higher the yield is if the dividend rate stays the same. This page has been added to your list of favorites. I’d argue in the short term, such a scenario doesn’t matter so much. The Motley Fool Canada » Dividend Stocks » Enbridge (TSX:ENB) Dividend: Just How Safe Is This 7.7% Yield? 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. The company has pipeline systems that serve both oil sands distribution and natural gas. The other moat creating advantage is the highly regulated nature of the business. But with that said, Enbridge’s dividend safety has weakened over the years, especially since the Spectra merger. Considering we are in the midst of a global pandemic that has wreaked havoc on oil prices, this is a strong sign. Click to remove it from your list. Hier erhalten Sie eine Übersicht über die Dividendenzahlung und Dividendenrendite von ENBRIDGE sowie die anstehenden und vergangenen Hauptversammlungstermine (HV-Termine). The company is currently paying out 90% of free cash flows and 65% of operating cash flows towards the dividend. I understand I can unsubscribe from these updates at any time. Despite these subsidiaries offering investors a lot of positives, many investors are worried. It has raised its dividend, even as oil producers slashed and eliminated theirs. Some people stick to more stable investments, like Canadian financial institutions such as TD Bank (TSE:TD), or RBC (TSE:RY). All Instrument Types. 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