Many investors who prioritize stable and reliable income over growth choose to invest in dividend stocks with a long-term perspective. The goal is to gradually build wealth, create a substantial nest egg, and secure a comfortable retirement with consistent lifetime income streams similar to pensions.
A crucial element of this investment strategy is selecting a core holding that meets certain criteria to withstand market fluctuations and sustain dividend payments over an extended period. One such top-of-mind choice in the energy sector is a leading energy infrastructure company with a market capitalization of $115.9 billion and a dividend yield of 6.9% per share.
This company has demonstrated strong performance, with a 15.9% year-to-date increase as of August 8, 2024, outperforming both the sector and the broader market. Additionally, the company has a track record of increasing quarterly payouts annually, making it a reliable choice for income-focused investors.
For example, an investor who has accumulated 5,000 shares of this company can expect to receive $18,410.66 in dividends annually or $4,602.67 quarterly. This passive income exceeds the average annual payments from the Canada Pension Plan (CPP) and Old Age Security (OAS) combined.
While some market analysts express concerns about the company’s high debt levels and capital-intensive operations, the overall positive attributes of the company, such as its diversified portfolio, predictable cash flows, and steady dividend payments, outweigh the potential drawbacks.
Moreover, the company’s recent financial performance shows increases in key metrics like adjusted EBITDA, earnings, and distributable cash flow, demonstrating its continued growth and stability. The company’s CEO has expressed optimism about future growth opportunities across its various business segments.
Overall, this company exhibits the qualities of a solid buy-and-hold investment option for generating passive income over the long term, thanks to its financial strength, growth drivers, and consistent dividend payments.
