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

monthly desk calendar
Dividend Stocks

This 7.8% Dividend Stock Pays Out Every Month

Not all monthly dividend stocks are created equal. And this top stock is certainly a strong choice for passive income.

Read more »

A worker gives a business presentation.
Dividend Stocks

Is TMX Group Stock a Buy, Sell, or Hold for 2025?

TMX Group (TSX:X) stock has been a consistent wealth-builder, generating 4,630% in total returns since 2002. Should you buy, sell,…

Read more »

Man data analyze
Dividend Stocks

2 Deeply Undervalued Dividend Stocks to Buy in November

Here are two stocks that I view as deeply undervalued this November.

Read more »

Dividend Stocks

The 2 Best Canadian Blue-Chip Stocks to Buy Now

Blue-chip stocks can be some of the best stocks to have in any portfolio. But when they're trending upwards, investors…

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These top dividends stocks have consistently paid and increased their dividends. Further, this trend will continue.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »