The Loonie Bin: Enbridge, My Golden Boy

The Loonie Bin: Enbridge, My Golden Boy

Enbridge, My Golden Boy

“Enbridge Inc. today announced that its Board of Directors has declared a quarterly dividend of $0.49 per common share payable on March 1, 2011 to shareholders of record on February 15, 2011. The dividend reflects a 15% increase from the Company’s prior quarterly rate of $0.425 per share”– CALGARY, ALBERTA–(Marketwire – 12/01/10)

What a birthday present I got this week! I remember back when I first bought Enbridge stock last year. I had no idea what I was doing and after talking with my brother on how well ENB was doing I decided to buy in. The day after I bought the shares, the stock dropped .50 cents and I almost had a bird. Like most people, my first reaction was to sell, sell, sell and cut my loses before it was too late but I kept a cool head and persevered. I’ve learned so much since my awkward start and now that I’ve found a great strategy to follow, self investing has become second nature. Part of me likes seeing green numbers when I check my portfolio, but part of me also likes seeing red numbers so that in the near future I can buy more shares when the price is right.

So what’s the big deal about a 6.5 cent increase you say? I bought my Enbridge shares when they were $48.53 and paid a dividend of $1.70 per share. My yield on my investment was:

1.70 / 48.53 = 3.5%
That might not seem like very much of a return, but look at my yield jump up with the new dividend:
1.96 / 48.53 = 4.038%
My new yield is just over 4% on the same stocks I purchased last year. And the best part is I didn’t have to lift a finger to get the increase. The only thing I have to do is look forward to my new dividends being paid into my trading account next year. If your still thinking to yourself, “Big whoop..” just imagine if my return increased .5% each year. After ten years, my return would be over 9%. That’s an almost guaranteed 9% return in year 11 of my investment. That’s huge considering most investments fluctuate with the market and can never be consistent. Slowly but surely my portfolio will grow through small dividend increases every year and my goal of an earlier retirement will become a reality. Until that day comes, I’ll welcome any dividend increase with open arms.

To my dozens and dozens of readers:

Do you own Enbridge stocks? Are you excited like me hearing the great news?


Kyle said…

I’d like to buy some of their stocks, but I’m waiting for the next dip in their stock price before I throw some funds in it. I currently own BCE, IGM, and just recently acquired SLF.

What I’m watching right now is EMA, ENB, and MCD, and waiting until a decent price comes.

Addicted2dividends said…

Sounds like a solid start, Kyle. I have my pile of dividends waiting for a good price to snag some more stocks from my list.

Financial Cents said…

I do own ENB and love this news 🙂

Have a great weekend!

Anonymous said…

I bought 800 ENB for my retired mother in two tranches in early 1995. The total cost was $23,846. Thanks to 2 stock splits and numerous dividend increases, she now owns 3,200 shares worth $181,824 @ Friday’s close of $56.82, yielding $6,272 a year in dividends. With the latest dividend increase, her yield to cost rises to 26.3%.

She’s nearly 89. Should I sell her 3,200 shares, pay the capital gains, and re-invest in bonds (as financial advisors so often recommend)?

Don’t be silly.

Anonymous said…

I would like to own it and as Kyle said waiting for the next dip. Now the question is : Should I wait OR just buy it at any price? Since my return will be decided based on the initial purchase.

Thanks for sharing

Addicted2dividends said…

To FC: Amen brother!

To Anom 1: That’s awesome! It gives me great hope that an investment like that can pay off over the years. I hate bonds and will never put my money into them.

To Anom 2: That’s a tough one. I was told by a wise man that I met through blogging that buying stock in a good company like Enbridge is a sure bet at any price but ideally you should buy it when it heads for a dip. Market timing is extremely hard to do, but market corrections happen all the time, you just have to be patient. I bought when it was yielding 3.5% and the first dividend increase popped it up to over 4%.

I will make a post on this question later this week, as the answer can be two sided.

pattirose said…

I’m curious about that also – buy now or wait? I have been watching TRP for a couple years but have decided to go with ENB but …. if I can get it cheaper later on down the road.
(patiently waiting for the post)

Addicted2dividends said…

I apologize for not having the post up yet. We are 1 week away from moving in our brand new house and I’m swamped. I will try to have it up by sat afternoon.

Kyle said…

On the upside, today us BCE owners also got fantastic news.

pattirose said…

No need to apologize. It sounds like your plate is mighty full. I hope the weather cooperates, moving is tough even at the best of times!


About EdR

Tant que les lions n’auront pas leurs propres historiens, les histoires de chasse continueront de glorifier le chasseur. (proverbe africain)

Posted on February 7, 2011, in training tips. Bookmark the permalink. Leave a comment.

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