New Investors: Enbridge (TSX:ENB) Is a Must-Have +6% Dividend Stock for Your Holiday Wish List

Enbridge Inc. (TSX:ENB)(NYSE:ENB) is a strong buy this holiday season. Take a look at the data and decide for yourself.

| More on:

It’s easy to see why big-name stocks attract so much attention from newcomers, with one of the most searched for terms on the internet being “investing for beginners” followed closely by “energy stocks.” Below you will find one of the hottest commodities on the TSX index — a Canadian superstar stock that often ranks high in walkthroughs of how to invest in the number one domestic stock market.

I’m going to take a look at the data for one of the best stocks to buy right now and outline one of the quickest ways to make money trading stocks on the TSX index. If you want to see how to start investing in energy stocks the (relatively) risk-free way, read on!

Enbridge (TSX:ENB)(NYSE:ENB)

This is one of the top TSX stocks to watch and often comes up in lists of must-have Canadian stocks. Enbridge is defensive, with a merry market cap of $78 billion. It has seen a one-year past earnings loss of 39.2%, but its overall five-year average past earnings growth of 32% is what we should focus on here, given the extreme turbulence of the last year.

A PEG of 0.9 times growth indicates great value in terms of growth, though a high comparative debt level of 88.2% of net worth shows that this ticker is not without risk.

With a high P/E, is Enbridge good value for money?

A P/E of 44.5 times earnings may have some value investors scratching their heads, but the fact is that this chunky ratio tells us more about the desirability of this ticker than it does its true value: we’ve already seen a low PEG, while a P/B of 1.5 times book indicates middling value in terms of assets. A dividend yield of 6.85% is probably where the focus should remain here, which investors can lock in by buying at today’s prices.

Quality and momentum indicators are the two other main factors that drive investment choices on the TSX index. Though a ROE of 3% is low, a 49.1% expected annual growth in earnings should have growth investors interested and places Enbridge on the list of “nice” stocks this holiday season (steering clear, of course, of “naughty” stocks).

In terms of momentum, Enbridge is about as dull as they come on the TSX index — and that’s a good thing to see in a stock that you will want to buy and hold for the long term. In terms of share price, it’s gained a scant 0.61% in the last five days (low, while remaining positive), while its industry-trailing beta of 0.8 highlights low volatility; meanwhile, its share price is discounted by a very tedious 10% against its future cash flow value. In short, if this ticker were a colour, it would be the most vanilla shade of beige.

The bottom line

As outlined above, passive income through dividends is one of the most popular ways to make money with stocks, with energy stocks being one of the top sectors of investment in Canada. Going through the data above, it’s easy to see why Enbridge is one of the best stocks on the TSX index and a strong buy for your holiday portfolio wish list.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Enbridge is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »