Enbridge Is One of the Best Long-term Dividend Stocks on the TSX Today

As far as core holdings in an income-oriented portfolio go, Enbridge Inc. (TSX:ENB)(NYSE:ENB) continues to be a top pick of mine, for a number of very important reasons. This is a company with the cash flow stability and growth potential to not only sustain its current dividend yield but continue growing its yield over time.

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.

As such, I view this dividend as sustainable, and do think there is room for dividend increases on the horizon once new pipeline expansion projects are fully online this year. I think Enbridge could be one of the most undervalued high-quality dividend options on the TSX today, and would thus encourage investors to take advantage of this abnormally high yield today.

Invest wisely, my friends.