An In-Depth Look at Enbridge Inc's Upcoming Dividend and Financial Health
Introduction to Enbridge Inc's Dividend Announcement
Enbridge Inc (ENB, Financial) recently disclosed a dividend of $0.92 per share, scheduled for payment on June 1, 2024, with the ex-dividend date on May 14, 2024. This announcement has drawn attention to the company's dividend track record, yield, and growth rates. Utilizing data from GuruFocus, we will delve into the performance and sustainability of Enbridge Inc's dividends.
Overview of Enbridge Inc
Enbridge Inc operates a vast network of midstream assets essential for transporting hydrocarbons across the United States and Canada. This includes the Canadian Mainline system, regional oil sands pipelines, and extensive natural gas pipelines. Additionally, Enbridge Inc manages a regulated natural gas utility and is the largest natural gas distribution company in Canada. The company also invests in renewable energy, primarily focusing on onshore and offshore wind projects.
Examining Enbridge Inc's Dividend History
Since 1985, Enbridge Inc has consistently paid dividends, which are issued quarterly. Remarkably, the company has increased its dividend annually since 2003, earning it the status of a dividend achiever—a recognition awarded to companies that have raised their dividends for at least 21 consecutive years. Below is a visual representation of the annual Dividends Per Share to illustrate historical trends.
Breaking Down Enbridge Inc's Dividend Yield and Growth
Currently, Enbridge Inc boasts a trailing dividend yield of 6.98% and a forward dividend yield of 7.07%, indicating anticipated dividend growth over the next year. Over the last three years, the annual dividend growth rate was 3.10%, which increased to 5.50% over five years. Over the past decade, the growth rate of annual dividends per share has impressively reached 11.10%. As of today, the 5-year yield on cost for Enbridge Inc stock is approximately 9.12%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of dividends is often gauged by the dividend payout ratio, which for Enbridge Inc stands at 1.19 as of December 31, 2023. This ratio suggests potential concerns about the sustainability of the company's dividends. However, Enbridge Inc's profitability rank is 7 out of 10, indicating robust earnings relative to its peers. The company has also reported consistent positive net income annually for the past decade, reinforcing its strong profitability.
Growth Metrics and Future Outlook
Enbridge Inc's growth rank is 7 out of 10, reflecting a favorable growth trajectory compared to its competitors. Despite this, the company's average annual revenue growth rate of 3.10% over the past three years underperforms approximately 74.91% of global competitors. Additionally, the 3-year EPS growth rate of 7.30% also trails behind 65.39% of global competitors. The 5-year EBITDA growth rate stands at -2.20%, which underperforms approximately 78.1% of global competitors, raising concerns about long-term growth sustainability.
Conclusion and Next Steps
While Enbridge Inc has demonstrated a commendable dividend history and offers an attractive yield, the sustainability of its dividends, given the payout ratio and mixed growth metrics, warrants careful consideration. Investors should weigh these factors alongside the company's strong profitability and consistent income history when assessing its future dividend potential. For those seeking high-dividend yield opportunities, consider using the High Dividend Yield Screener available to GuruFocus Premium users.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
