is enbridge dividend safe

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. 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. It wasn’t that long ago that major producers like Suncor and Canadian Natural Resources were urging the government to make sweeping changes to the operations of Enbridge’s mainline network, citing it as essentially unfair. It has a network of crude oil and natural gas pipelines across Canada — assets that can’t be easily replicated today. Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada. There’s some solid reasoning for this as well. This year will have a lot of unknowns. No. The company had historically yielded in the high 5% range prior to spiking to the mid 9% range in March. Enbridge is often touted as a monopoly in the pipeline sector, amassing over 27,564 kilometers of active crude pipelines across North America. The issue is more over the long term, as struggling energy companies simply can’t afford to pay their bills. Enbridge’s payout ratio is 124% !!! Check out Stockrover Here! However, Stocktrades is by no means associated with the Toronto Stock Exchange, or any of the companies we cover. For 2020, it expects DCF to fall within a range of $4.50 and $4.80. Save time by adding this page to your list of favorites. If there’s one thing I’ve come to learn, especially in 2020, it’s to expect the unexpected. Do you think a company with that kind of excellence will slash its dividend at the first sign of bad news? Currently, Enbridge offers a high forward yield of 8.1%. March 22, 2019. I’ve can’t count the amount of times I’ve come to Enbridge’s defense when somebody accuses the dividend of being on the brink of being cut. Last year, Enbridge’s capital spending was about $14 billion. It’s nearly impossible to build new pipelines, especially mega projects that cross provincial lines. However, further setbacks could slow the company's short-term growth prospects. So, lets get down to the brass tacks and look at the company’s primary attraction, it’s juicy dividend yield. The company is currently paying out 90% of free cash flows and 65% of operating cash flows towards the dividend. This is your chance to get in early on what could prove to be very special investment advice. We still could see a cut. Enbridge is an energy generation, distribution, and transportation company that has operations in both the United States and Canada. The midstream industry is one that enjoys numerous competitive advantages for several reasons. Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group. 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. That said, the demand for oil and natural gas has not just declined but fallen off a cliff amid the pandemic. In 2019, Enbridge earned $4.57 per share in distributable income. 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. That comes out to $2.26 in U.S. dollars and equals an impressive 8.8% yield. However, did Canadian investors make a huge mistake throwing a blanket outlook over both producers and pipelines? So, is it sustainable? Don’t worry; this 7.7% yield isn’t going anywhere. It’s flagship asset is the Canadian Mainline system. For example, pipeline project… 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. Do I think investors looking solely at the company’s payout ratio in terms of earnings are making a mistake? Many of Enbridge’s customers are among the best in the sector, but even those companies are hurting today. 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. Not to alarm you, but you’re about to miss an important event. It is important to seek out a qualified investment, tax or legal professional before making any decisions related to your own personal investments. First, it’s highly capital intensive, with major projects often costing billions of dollars to complete. But now that we continue to move forward through the COVID-19 pandemic, the oil and gas industry (which was already in a bear market prior to the pandemic) is getting hit even harder. Enbridge stock is offering one of the best dividend yields these days. An analysis of Enbridge’s dividend must go a little deeper than just the numbers. Enbridge’s forward dividend is now $3.24 CAD ($2.43 USD) giving a dividend yield of about 6.0%. I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. Enbridge common shares have a Compound Annual Growth Rate (CAGR) of more than 11% over a 25-year period. If there’s one thing I’ve come to learn, especially in 2020, it’s to expect the unexpected. The company often locks up producers in long-term take or pay contracts, which makes Enbridge’s cash flows and the dividend more reliable. appeared first on The Motley Fool Canada. They see a high payout ratio and assume the dividend is close to being cut. This article was coproduced with Dividend Sensei and edited by Brad Thomas. Junior producers and even some major producers in Suncor’s (TSE:SU) case were slashing dividends at rates we have never witnessed before. For every dollar they take in they pay out 1.24$. Let’s take a closer look at this payout to see if it’s sustainable. Microsoft says it found malicious software in its systems . 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. 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 Dividends and Common Shares. These earnings should be stable no matter what happens to the underlying energy market. I doubt it. The payout should be safe, given the DCF outlook and the decent growth portfolio. Current Issue Meanwhile, it paid $6 billion in dividends in 2019. 2020 might see a pause on these initiatives, but they’re both viable strategies for the long term. I’m a shareholder myself, and I’m not spending much time worrying about Enbridge’s dividend. The Enbridge stock is a must-buy for investors seeking a growing income stream. Remember, Enbridge has been dealing with a weak energy market for years now, and it has been weathering that storm just fine. But volatile energy prices have kept investors on the sidelines.The post Enbridge Stock Is Yielding 8%, But Is it Safe to Buy? All rights reserved. Enbridge is currently trading at 15.3 times forward earnings. 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. 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%. Buy during the strong ESG trend Has long owned this, a great Canadian compounder, but the stock has gotten expensive. __CONFIG_colors_palette__{"active_palette":0,"config":{"colors":{"f3080":{"name":"Main Accent","parent":-1},"f2bba":{"name":"Main Light 10","parent":"f3080"},"trewq":{"name":"Main Light 30","parent":"f3080"},"poiuy":{"name":"Main Light 80","parent":"f3080"},"f83d7":{"name":"Main Light 80","parent":"f3080"},"frty6":{"name":"Main Light 45","parent":"f3080"},"flktr":{"name":"Main Light 80","parent":"f3080"}},"gradients":[]},"palettes":[{"name":"Default","value":{"colors":{"f3080":{"val":"var(--tcb-skin-color-0)"},"f2bba":{"val":"rgba(247, 145, 29, 0.5)","hsl_parent_dependency":{"h":32,"l":0.54,"s":0.93}},"trewq":{"val":"rgba(247, 145, 29, 0.7)","hsl_parent_dependency":{"h":32,"l":0.54,"s":0.93}},"poiuy":{"val":"rgba(247, 145, 29, 0.35)","hsl_parent_dependency":{"h":32,"l":0.54,"s":0.93}},"f83d7":{"val":"rgba(247, 145, 29, 0.4)","hsl_parent_dependency":{"h":32,"l":0.54,"s":0.93}},"frty6":{"val":"rgba(247, 145, 29, 0.2)","hsl_parent_dependency":{"h":32,"l":0.54,"s":0.93}},"flktr":{"val":"rgba(247, 145, 29, 0.8)","hsl_parent_dependency":{"h":32,"l":0.54,"s":0.93}}},"gradients":[]},"original":{"colors":{"f3080":{"val":"rgb(23, 23, 22)","hsl":{"h":60,"s":0.02,"l":0.09}},"f2bba":{"val":"rgba(23, 23, 22, 0.5)","hsl_parent_dependency":{"h":60,"s":0.02,"l":0.09,"a":0.5}},"trewq":{"val":"rgba(23, 23, 22, 0.7)","hsl_parent_dependency":{"h":60,"s":0.02,"l":0.09,"a":0.7}},"poiuy":{"val":"rgba(23, 23, 22, 0.35)","hsl_parent_dependency":{"h":60,"s":0.02,"l":0.09,"a":0.35}},"f83d7":{"val":"rgba(23, 23, 22, 0.4)","hsl_parent_dependency":{"h":60,"s":0.02,"l":0.09,"a":0.4}},"frty6":{"val":"rgba(23, 23, 22, 0.2)","hsl_parent_dependency":{"h":60,"s":0.02,"l":0.09,"a":0.2}},"flktr":{"val":"rgba(23, 23, 22, 0.8)","hsl_parent_dependency":{"h":60,"s":0.02,"l":0.09,"a":0.8}}},"gradients":[]}}]}__CONFIG_colors_palette__, {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}. 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. Can Shopify (TSE:SHOP) Keep up It’s Torrent Growth Rate? Nowadays, it’s rare to find a big distribution yield and a high degree of safety. Investors are worrying about all the extra inventory out there. Please read the Privacy Statement and Terms of Service for more information. It has also paid consistent dividends since the 1940s. ISSN : 2393-073X; ijdmsr.editor@gmail.com; Home; About Us; Call For Paper; Paper Submission; Editorial Board; Issue. But does that make it a guarantee the company maintains its dividend? Published Tue, 19 Jun 2018 03:47:12 -0400 on Seeking Alpha. I understand I can unsubscribe from these updates at any time. 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. 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