Money market funds have seen massive inflows, but rate cuts are making them less attractive. Investors may soon rotate out as yields decline further. High-quality dividend stocks offer a strong alternative to cash, providing reliable income, safety, and inflation protection even in a low-rate environment. Two undervalued stocks yielding 7% and 8% are ideal for income seekers, combining solid fundamentals with attractive growth potential and stable payouts.
With a significant portion of its assets being contracted by shippers for the long term, ENB's business model is less exposed to volatility in oil and gas prices.
Enbridge has paid dividends for decades. The company's high-yielding payout is on a very sustainable foundation.
The interest rates have started to gradually come down, where the consequences of it could already be seen across the dividend landscape. On the one hand, this implies an immediate portfolio value increase, which is obviously not a negative. On the other hand, the reducing interest rates push down the discount rates, which, in turn, inflate asset prices. This has a direct negative and mathematical effect on the dividend yields.
Enbridge (ENB) closed at $41.09 in the latest trading session, marking a +0.56% move from the prior day.
In this article I discuss methods for finding undervalued stocks. Then we discuss Enbridge preferred stock symbol EBBNF (ENB.PF.U on the Toronto Exchange). And then I document why we believe this Enbridge preferred stock is the best U.S. dollar denominated investment grade preferred stock in the market right now.
The Federal Reserve has finally started reducing interest rates. That should lower Enbridge's borrowing costs, enhancing its cash flow and growth prospects.
Recently, Zacks.com users have been paying close attention to Enbridge (ENB). This makes it worthwhile to examine what the stock has in store.
Canada's Enbridge is one of the largest midstream energy companies in North America. The stock's 6.6% dividend yield is backed by 29 consecutive annual dividend increases.
As interest rates decline, investors will likely shift from cash to high-yield, low-risk investments, benefiting Enbridge's preferred and common shares. Three recently reset preferred shares of Enbridge offer dividend yield above 7.5% fixed for the long term. Four preferreds will be reset within one year, resulting in up to a 90% increase in dividends.
Enbridge's valuation has surged to over $40/share, making it less attractive compared to our initial buy at $31.7/share. Despite solid operational performance and growth prospects, the current price limits upside potential, prompting a "Hold" rating. Enbridge remains a safe income investment in the NA energy sector, but we recommend buying only below $36/share for optimal returns.
Enbridge's new Series 4 preferred shares offer a quarterly floating dividend based on the three-month Canada Government bond rate plus 238 bps. The initial dividend yield is 8.65%, but future dividends may decline as short-term interest rates decrease. Series 4 shares are speculative, relying on short-term interest rates, while Series 3 offers a fixed yield for five years.