Energy transportation and infrastructure companies are typically looked to as relatively stable long-term buy and hold equities, in that these firms tend to provide income investors with a stable and growing revenue stream over time.
With the vast majority of capacity generally secured with long-term contracts (indeed, most pipelines will not gain approval without significant assurances the capacity being brought online will yield profit), investors can rest assured that companies such as Enbridge Inc. (TSX:ENB)(NYSE:ENB) will be able to provide income and stability long-term.
As one of the largest energy infrastructure companies in North America, Enbridge has recently invested heavily in diversifying the company’s operations, purchasing Spectra Energy in 2017 to add on additional natural gas transportation exposure to the company’s portfolio – a move which has turned many investors and analysts sour, as this acquisition was (1) not cheap and (2) required the company to further lever up, decreasing the company’s ability to maintain a dividend growth rate of more than 10% (which is still amazing if you ask me).
With a number of regulatory risks always present, Enbridge is a company which has fallen out of favor with many investors during 2017, and while a 14% drop over the past 52 weeks does cast a shadow over the ability of Enbridge to increase substantially in 2018, its juicy dividend yield does provide a significant buffer for investors looking to build a long-term position in Enbridge.
Invest wisely, my friends.
