Can You Earn a 9% Starting Yield with Enbridge Stock Dividend?

High-yield stocks with sustainable dividend payouts are an excellent way to start earning passive income today. That's why this article highlights Enbridge Inc. (ENB), a major player in North America's energy sector. Enbridge is a high-yield, essential business and a well-managed company that has consistently delivered dividend growth outpacing inflation. With a current dividend yield of approximately 7.2%, let's delve into can Enbridge provide a 9% starting yield and whether it is an attractive investment opportunity.

Current Enbridge Stock Price Performance

From May 16, 2024, to May 22, 2024, the stock price of Enbridge Inc. fluctuated between $36.50 and $37.01. Trading volumes varied significantly during this period, with the highest volume recorded on May 17, 2024, at 7,835,780 shares, and the lowest on May 20, 2024, at 2,693,863 shares. The stock closed at $36.76 on May 16 and $36.61 on May 22, showing a slight downward trend over the week. The price movements were relatively stable, with no significant spikes or drops, indicating a period of moderate volatility and consistent trading activity.

The reasons behind the stock price movement:

• Positive Quarterly Earnings: Enbridge reported positive quarterly earnings, which likely contributed to investor confidence and stable stock performance.
• Expansion Plans: The announcement of acquiring three regulated natural gas utilities from Dominion Energy to enhance cash flow reliability and growth prospects may have positively influenced investor sentiment.
• Equity Raise Announcement: Enbridge's plan to raise up to C$2.75 billion through an equity offering to fund the acquisition of natural gas utilities could have introduced some uncertainty, contributing to the slight downward trend in stock price.
• AI Growth Potential: The company's positioning to capitalize on AI-driven energy demand might have provided a long-term positive outlook, supporting the stock's stability.
• RNG Investments: Enbridge's investment in renewable natural gas (RNG) projects, aimed at reducing greenhouse gas emissions, may have bolstered its appeal to environmentally-conscious investors.

Enbridge has projected robust growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) over the next few years. The company anticipates that its distributable cash flow (DCF) will grow by 3% annually through 2026 and by approximately 5% thereafter. This growth is expected to support continued dividend increases. In line with this, the board raised the dividend payout by 3.1% for 2024. Impressively, Enbridge has consistently increased its dividend annually for the past 29 years. Current share price and analysis may suggest an 8% yield from ENB stock.

Should I Buy Enbridge Now?

Enbridge (ENB) remains a strong option for investors seeking high dividend yields, currently offering approximately 7.2%. The company has a solid history of dividend growth and financial stability. While investors should anticipate ongoing volatility until central banks signal a decline in interest rates, Enbridge already appears undervalued. It provides an attractive dividend yield, making it a worthwhile investment while waiting for a market rebound. For contrarian investors with available capital, this stock should definitely be on your radar.