Enbridge (ENB -0.65%) is an outstanding dividend stock. The Canadian energy infrastructure giant has increased its payout for 28 straight years. Meanwhile, it currently offers investors a 7.2% dividend yield -- several times above the S&P 500's 1.7% dividend yield -- that it supports with its strong cash flows and financial profile.
There's no end in sight for the company's dividend growth streak. It continues to secure new expansion projects that should give it the power to keep increasing the dividend. That adds to its attraction as a great income stock to buy for the long haul.
NYSE: ENB
Key Data Points
Securing another growth project
The French government recently selected a consortium that includes Enbridge to develop a new wind energy project offshore Normandy. The Centre Manche 1 project will have an expected installed capacity of 1 gigawatts. That will make it the largest offshore wind farm in France. It will generate enough power to meet the needs of 1.5 million people, or more than half the energy requirements for Normandy's population.
The company and its partners expect to finish the project around 2030. It will be the sixth offshore wind project for the company and its partners in France. They finished the 480-megawatt (MW) Saint Nazaire project last year. Meanwhile, they plan to bring Provence Grand Large (24 MW), Fecamp (497 MW), and Calvados (448 MW) online over the next three years. They're also developing the Dunkirk (600 MW) offshore wind farm.
These investments will supply Enbridge with growing earnings over the next few years. They're part of the company's expanding renewable energy portfolio as it steadily invests in cleaner energy sources to support the global transition to lower carbon energy.
An increasingly bright outlook
The Normandy offshore wind farm further enhances Enbridge's long-term growth outlook. The company has an extensive pipeline of projects it expects to finish over the next several years. The company has secured 17 billion Canadian dollars ($12.4 billion) of capital projects, excluding Normandy, across its four core franchises (liquids pipelines, gas transmission, gas distribution and storage, and renewables).
Most of those projects are on track to enter service by the end of 2025. That gives Enbridge the visibility that it can grow its cash flow per share by a 3% annual rate during that time frame as its growth projects will more than offset some expected near-term headwinds from tax legislation.
Enbridge has also secured several longer-term expansions in the past year, extending its growth outlook well into the latter half of this decade. These include:
- T-North Expansion (Aspen Point): It's investing CA$1.2 billion ($880 million) to expand the capacity of its T-North pipeline in Western Canada, which should enter service in 2026.
- Woodfibre LNG: It made a $1.5 billion investment to support the construction of an LNG export facility that should begin operations in 2027.
- T-South Expansion (Sunrise): Enbridge approved a CA$3.6 billion ($2.6 billion) capacity expansion of its T-South natural gas pipeline in Western Canada.
These large-scale expansions will help power the company's growth post-2025. Enbridge anticipates that those and other projects will help accelerate its cash flow growth rate to 5% annually after 2025. That could support dividend growth at around that same pace over the long term.
In addition to those secured projects, Enbridge has many other projects under development across its four core franchises, like Dunkirk in renewables and another potential expansion of T-North. It's also working on several potential projects in new emerging energy technologies like renewable natural gas (RNG), carbon capture and storage, and hydrogen. For example, the company recently invested $80 million for a 10% interest in Divert, a leading RNG infrastructure company. That agreement includes the potential for further investment opportunities to help Divert build out more than $1 billion of future wasted-food-to-RNG projects it has lined up.
The big-time payout has plenty of power to keep rising
Enbridge continues to secure new expansion projects that should fuel its growth for years to come. Because of that, the company should have no problem continuing to increase its big-time dividend. That makes it a great stock for income investors to buy and hold long-term.
