Simply over a yr in the past, I informed you Enbridge‘s (NYSE: ENB) dividend was “undoubtedly secure.”
On the time, the inventory’s yield was 6.7%, money movement was rising and the corporate’s payout ratio was anticipated to be 69% in 2021.
Moreover, Enbridge had raised its dividend for 26 years in a row.
Let’s see whether or not that dividend is as secure as we speak because it was final yr…
Enbridge strikes about 30% of the crude oil produced in North America and 20% of the pure fuel consumed stateside.
Money obtainable for distribution, a measure of money movement, rose from $7 billion in 2020 to $8 billion in 2021, however it’s anticipated to stall at $8 billion once more in 2022. That’s not an issue as long as it doesn’t go backward. If money movement shrinks, the dividend security ranking might be lowered.
Although the dividend was raised in January to CA$0.86 ($0.62) per share from CA$0.835 ($0.61) per share – making this the twenty seventh straight yr of dividend will increase – dividends paid is definitely anticipated to shrink this yr to $5.1 billion from $5.7 billion in 2021.
The decrease payout is decreasing the payout ratio from 71% final yr to a projected 64% for 2022.
The one blemish on Enbridge’s dividend security is that its debt is simply too excessive, although administration is within the strategy of reducing its debt stage.
Because of the bear market and better dividend, Enbridge’s dividend yield is now north of seven%.
Enbridge’s decrease payout ratio, ample money movement and almost three-decades-long observe document of annual dividend raises imply that its dividend is simply as secure because it was a yr in the past.
Dividend Security Ranking: A
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Good investing,
Marc