6.9% Dividend! I’ve Been Buying and Holding This TSX Stock for Decades

High-yield dividend stocks are attractive investments for passive income. While the TSX has a few high-yield stocks, only a few are worth buying and holding for decades because they offer well-covered payouts and management teams committed to increasing shareholder value.

With that in mind, let’s take a look at a Canadian stock offering a strong and well-covered 6.9% yield. Investors can rely on this fundamentally strong company to earn stress-free passive income for decades.

Shares with a dividend yield of 6.9%

For investors interested in high-quality dividend stocks, Enbridge (TSX:ENB) has a consistent record of dividend payments and growth. The energy company has paid dividends for over 69 years and increased them for 29 consecutive years. The company’s dividend has grown at an impressive rate of 10% per year during that time, demonstrating the resilience of its payouts and management’s commitment to increasing shareholder value.

The energy company is offering a quarterly dividend of $0.915 per share, a yield of 6.9% based on the closing price of $53.35 on August 19.

Why invest in Enbridge shares?

Enbridge isn’t just a solid investment because of its impressive past performance and high profitability. Future earnings per share (EPS) and distributable cash flow (DCF), which drives the payout, are expected to increase. That means Enbridge is likely to increase its dividend in the coming years.

As a leading energy infrastructure company, Enbridge is a key transporter of oil and gas in North America. Its extensive network of liquids pipelines serves as a vital link between key supply basins and major demand centers, such as refining hubs. This strategic positioning allows Enbridge to maintain high utilization rates across its existing network, creating a strong foundation for consistent earnings and DCF per share growth.

In addition, Enbridge’s assets are supported by long-term contracts, power purchase agreements (PPAs), regulated fee-for-service frameworks and other low-risk commercial arrangements. These factors enable the company to generate stable and resilient cash flows, even in times of economic uncertainty or commodity price volatility. This financial stability enhances the sustainability of Enbridge’s dividend payments, providing investors with a reliable income stream.

Enbridge is committed to expanding its earnings base by investing in conventional and renewable energy assets. These strategic investments position the company to capitalize on future energy demand while diversifying its revenue streams. Additionally, Enbridge’s strong balance sheet will enable it to pursue strategic acquisitions, further enhancing its cash flow.

Enbridge’s secured growth portfolio now stands at an impressive $24 billion, supported by a commercial framework aligned with its low-risk business model. The company also focuses on low-capital-intensity growth projects and regulated investments in utilities or utility-like businesses. Enbridge is also improving its cost structure and implementing productivity initiatives to increase earnings, which will support future dividend payments.

Summary

Enbridge is a top passive income stock due to its solid dividend history, high profitability, resilient payouts, and growing profit base. Enbridge management expects EPS and DCF per share to grow at mid-single-digit rates over the long term, which will help increase the future dividend. Additionally, a payout ratio of 60-70% DCF is sustainable, making Enbridge a reliable high-yield stock for income investors.