Enbridge’s current yield sits just shy of 8% right now. This yield is now at levels where some investors may be worried about dividend sustainability. I do agree that the company’s dividend yield is high, but I would say this is one of the safest high-yield stocks on the TSX today.
This is primarily due to the company’s business model. Specifically, the nature of Enbridge’s core pipeline business is one which is governed by very favorable contracts with the company’s oil producing counterparts.
Unless we see a massive number of bankruptcies in this sector, which hasn’t materialized of yet, or production declines (which is unlikely given the oversupplied nature of the Canadian energy patch), Enbridge’s existing cash flows and future cash flow growth trajectory remains intact.
Invest wisely, my friends.