Nearing Retirement? The 3 Best Energy Dividend Stocks to Buy Now
The modern world doesn't exist without energy. Although there is an effort to shift toward cleaner alternatives like solar and wind, it is likely to take decades for this transition to have a material impact on the energy sector. With that backdrop, here are three energy stocks that dividend investors should be looking at today even as energy prices remain elevated.
One of the key traits of the energy sector is commodity price volatility. However, you can sidestep much of that risk with a midstream name like Enbridge (NYSE: ENB). The company owns a massive collection of oil and natural gas pipelines, a natural gas utility business, and a small but growing collection of clean energy investments. Virtually all of the company's business is backed by usage fees or long-term contracts. Essentially, the price of oil and gas aren't really that big of an issue for Enbridge's business, demand is far more important.
Enbridge currently offers a generous dividend yield of around 6.3%. The dividend has been increased annually for over 25 consecutive years, making the company a Dividend Aristocrat. And it expects to be able to grow distributable cash flow by 5% to 7% a year on average through 2024. That's backed by around 10 billion Canadian dollars in capital spending plans. The dividend should grow along with distributable cash flow. As for dividend safety, Enbridge expects to generate CA$2 billion more in cash than it needs for the next few years, which opens up opportunities for more growth and provides a cushion for the dividend.
Source Fool.com
