The market is full of superb investments that can provide a multitude of ways to generate a safe income stream. One of those great options includes Enbridge (TSX:ENB) and here’s why investors should consider the stock now.
What makes Enbridge an option for safe income?
Most would-be investors are aware of Enbridge to some degree. The company is best known for its massive pipeline segment, and for good reason. That segment, which includes both crude and natural gas elements, is huge.
In fact, Enbridge hauls one-third of all the crude produced in North America. Turning to natural gas, Enbridge transports one-fifth of the natural gas needs of the entire U.S. market.
In other words, Enbridge boasts one of the most significant defensive moats on the market.
Incredibly, that’s only one part of what makes Enbridge an option for safe income generation.
The energy infrastructure behemoth also operates a growing renewable energy business. That segment includes approximately 40 facilities located across Europe and North America.
Those facilities, which include hydro, solar and wind facilities, generate a reliable revenue stream backed by long-term, regulated contracts. Enbridge also continues to invest in the segment, with an incredible $10 billion allocated in the past two decades.
But once again, that’s not all.
Enbridge also operates the largest natural gas utility in North America. The utility business boats a whopping six million customers across Canada and the United States. That’s thanks to a series of acquisitions over the past year that have bolstered Enbridge’s position in the segment.
And like the renewable energy business, the utility business is incredibly defensive, bound by regulated contracts.
In short, Enbridge is a well-diversified, defensive investment that is a great option for safe income.
Let’s talk dividends
One of the main reasons why investors continue to flock to Enbridge is for the juicy dividend the company offers. As of the time of writing, Enbridge’s quarterly dividend earns an insane yield of 7.50%.
That makes Enbridge one of the best-paying dividends on the market. It also means that investors who can drop $40,000 into Enbridge as an option for safe income will earn a first-year income of nearly $3,000.
The reason I say first-year income is because Enbridge has an established tradition of providing investors with annual bumps to that dividend. That streak currently extends nearly three decades without fail.
In other words, investors not ready to draw on that income can safely reinvest those dividends until needed. This allows any eventual safe income stream to grow until needed.
Final thoughts
No stock, even a defensive pick like Enbridge, which is a top option for safe income, is without some risk. That’s why it’s important for prospective investors to buy Enbridge as part of a larger, well-diversified portfolio.
Buy it, hold it, and watch it grow.
