For investors with long-term perspective, and those with income needs or an income mandate to meet for retirement, I would undoubtedly suggest a fight towards safety and stability during these volatile times.
As such, companies like Enbridge Inc. (TSX: ENB)(NYSE:ENB), with dividend yields around 8% are great choices, in my view, for long-term investors worried about dividend cuts.
As with all companies out there, I think it is important to emphasize that no dividend is truly sacrosanct. That said, some dividend distributions are safer than others, and on that basis, Enbridge’s dividend payment is about as safe as they come.
The stock price deterioration Enbridge shareholders have experienced lately relates mainly to concerns about around counterparty risk, which is driving up the company's yield and increasing the company's profile from an income perspective, in my view.
There are very few companies that tend to have their valuations track their dividend, but Enbridge is certainly one such company. Anytime you see a blue-chip company like Enbridge with a yield rearing double digits it becomes clear there is a significant price dislocation at play.
As a company that will ultimately make it out of this mess, and highly likely maintain its dividend distributions, Enbridge is a company to own for the long-term at these levels. I would encourage investors to take advantage of the discount the market is offering today on a blue-chip Canadian company with an excellent dividend yield, the likes of which we have not seen in an exceedingly long time.
Invest wisely, my friends.
