Many companies on the TSX have paid a dividend for a significant amount of time, and even more have impressive track records of increasing dividends for consecutive years, growing an investor’s income stream over time at impressive rates. Perhaps no company has done this quite as good as Enbridge Inc. (TSX:ENB)(NYSE:ENB), however.
Enbridge is in the business of pipelines, and has survived and thrived through many market cycles, due mainly to the fact that the company’s long-term investments in infrastructure do not feel the pain of commodities cycles as much as pure-play oil & gas firms do in times of sustained lower oil & gas prices. Today’s price of oil is a far cry from its peak just a few years earlier, when the price of oil traded above $100 for quite some time, with the indication that prices would continue to rise indefitinitely.
As it happened, only a few firms in the oil & gas sector made it out of the most recent slump relatively unscathed, including Enbridge; most of these companies had similar characteristics, looking backward – assets that were relatively inelastic to oil prices, great management teams, and increasing dividend distributions over time.
Increasing a dividend continuously every year theoretically relies on growing earnings, in order for a company to maintain a certain dividend payout level. Enbridge’s track record speaks for itself, with annual dividend increases averaging more than 11% over the past 20 years, leading many retirees and income-focused investors toward this company.
Invest wisely, my friends.
