With a roughly $55 billion market cap, Canada-based Enbridge Inc. (NYSE:ENB) is among the largest energy companies in North America. It offers investors a robust 5.5% yield and has increased its dividend annually for 22 consecutive years. The dividend has grown at 12% a year on an annualized basis over the past decade -- roughly four times the historical rate of inflation growth! But read this before you jump at what sounds like a great investment.

Reducing complexity

Enbridge is generally considered a well-run company, the proof of which is in its impressive dividend history. Simply put, poorly run companies usually don't have 22 years of annual dividend hikes behind them. That said, in late 2016, Enbridge agreed to buy Spectra Energy for around $28 billion, setting off a string of big corporate changes.

A man welding an oil pipeline.

Image source: Getty Images.

Overall, the deal is expected to be a long-term positive. However, the acquisition brought with it oversight of Spectra Energy's controlled limited partnership, Spectra Energy Partners, LP. That addition increased the number of external entities controlled by Enbridge to four, leaving it with a very complicated corporate structure. Recent regulatory changes and tax law shifts, meanwhile, reduced the benefit of using all of these different controlled companies as funding vehicles.

So Enbridge decided that 2018 was the year to reduce complexity. It started working to roll up all of its controlled entities for what it hoped would be roughly $8.8 billion. That price tag has gone up to $10.4 billion now that negotiations have been completed and final agreements reached. This move will be a net benefit over the long term because Enbridge will get to keep more of the cash flow that it generates from the assets in these businesses -- and, perhaps just as important, its business will be much easier for investors to understand.

A lot of moving parts

That said, investors will need to keep a close eye on the news flowing out of Enbridge Inc. to make sure all of these deals get completed as planned. But this isn't all that's going on. Enbridge is also spending heavily on growth projects to expand its business.

In 2018, its goal is roughly 7 billion Canadian dollars in capital spending. In 2019 and 2020, it has plans for another CA$22 billion in spending. So not only is Enbridge in the middle of buying four companies, it is also in the middle of a capital spending spree. Management expects the projects it has lined up to push dividends higher by 10% a year over the next three years, an ambitious goal even if that growth is slightly below its historical average. The question is whether management is trying to do too much at once.

As if that wasn't enough, Enbridge is also selling noncore assets. The goal here is to help reduce leverage, which rose with the Spectra acquisition, while still managing to fund its big spending plans. It has already sold two assets, with additional sales inked but not yet completed. The total proceeds from these actions in 2018 should be around CA$7.5 billion. Enbridge hopes to get consolidated debt to EBITA (which basically assumes all of the proposed acquisitions get completed) below five times by the end of the year, down from nearly seven times in 2015. That's an important improvement that will bring its leverage more in line with peers, even if the process adds additional complexity into the mix.

Think carefully, watch closely

Simply put, Enbridge has a lot going on right now. If you are attracted to its 5.5% yield -- and there's good reason to be -- you can't simply set and forget the stock. You will need to pay pretty close attention to what's going on in the news. For more active investors, Enbridge might be worth the effort, but for investors who prefer a more hands-off approach, other options might be better.

If you aren't willing to watch this giant closely, you might be better off owning a more conservative energy player like Enterprise Products Partners L.P. (NYSE:EPD). Enterprise offers a 6% yield and 21 years of annual distribution hikes but slower historical and projected distribution growth. Slower distribution growth is a notable trade-off, but it's the kind that will let you sleep soundly at night.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.