Due to rising oil prices, the energy sector has driven Enbridge (TSX:ENB) throughout 2022. However, oil markets are becoming tighter, and prices are declining due to a worse economic outlook and a likely downturn of the global economy. Members of OPEC+, or the nations that export petroleum, won’t permit such a crisis to continue.
On October 5, 2022, OPEC+ assembled and decided to reduce production by two million barrels per day. After reaching above $100 per barrel in July, oil prices recently dropped to the mid-$80s. Aside from other challenges like rising inflation and interest rates, stock investors are uneasy due to this recent development.
The dividend performance of one of Canada’s top blue-chip firms remains impressive despite the increased volatility. Enbridge (TSX:ENB)(NYSE:ENB) keeps distributing enormous dividends. The current yield is 6.55% if you invest now. Additionally, the generous dividend provider outperforms the market year at $53.26 per share versus -8.73%, gaining 12.19%.
Best in the lot: Enbridge
If you’re looking for exposure to the energy industry, Enbridge is, without a doubt, the greatest option. Regarding financial stability and strength, the $105.23 billion energy infrastructure corporation ranks among the Canadian big bank stocks. This elite dividend stock is distinguished by its consistency. It has increased its dividend for 27 years running and counting.
Liquids Pipelines (58%), Gas Transmission (26%), Gas Distribution (12%), and Renewables (4%), are the four blue-chip franchises that make up the backbone of the company. Management claims that by continuously concentrating on synergies, it maximizes the value of the enterprises. The diversified asset base ensures sustainable organic growth production and the return of cash to owners.
Utility-like cash flows
With its diverse pipeline-utility strategy, Enbridge stands out from the competition. In addition to the low-risk commercial model, the utility-like cash flows are also very predictable. Management is also optimistic about the long-term reliability and growth of the cash flows that its assets will produce.
Energy stocks are facing challenges from rising interest rates and their effects on energy services. Enbridge can offset them with powerful positives like operating performance and system usage. Furthermore, revenue escalators are already present in the basic business. Enbridge has consistently provided accurate financial guidance over the past 16 years, and 2022 will be no different.
According to Al Monaco, the company’s president and chief executive officer, “Through the first months, we’re tracking to plan and on track to achieve our full-year EBITDA and DCF [distributable cash flow] per share projection.” The targets are $15 billion to $15.6 billion for adjusted EBITDA and $5.20 to $5.50 per share of DCF.
Invest and stay invested
Investors afraid of taking risks should feel comfortable investing in Enbridge now and continuing to do so in the future. If you spend $26,630 today to buy 500 shares, you can make $436.07 every three months. If you keep the stock and don’t sell it, the passive income might last for your entire life.