Enbridge Inc., together with its subsidiaries, operates as an energy infrastructure company. The company operates through five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services. The Liquids Pipelines segment operates pipelines and related terminals to transport various grades of crude oil and other liquid hydrocarbons in Canada and the United States. The Gas Transmission and Midstream segment invests in natural gas pipelines and gathering and processing facilities in Canada and the United States. The Gas Distribution and Storage segment is involved in natural gas utility operations serving residential, commercial, and industrial customers in Ontario, as well as natural gas distribution activities in Quebec. The Renewable Power Generation segment operates power generating assets, such as wind, solar, geothermal, waste heat recovery, and transmission assets in North America. The Energy Services segment provides physical commodity marketing and logistical services to refiners, producers, and other customers in Canada and the United States. The company was formerly known as IPL Energy Inc. and changed its name to Enbridge Inc. in October 1998. Enbridge Inc. was founded in 1949 and is headquartered in Calgary, Canada.

Enbridge looks like a high-quality infrastructure asset, but one that is no longer cheap, with a notable debt burden. On valuation multiples, the picture is rather restrained: P/E, P/S, and P/B are above industry medians, while P/FCF looks especially stretched, which limits the potential for rerating. At the same time, the multiples themselves do not show a sustained improvement over time, meaning the market is already pricing in a fair amount of optimism into future cash flows. The company’s strength lies in the scale of its business: revenue, EBITDA, operating profit, and net income remain substantial, and the absolute levels of earnings and assets support its investment profile. However, profitability compared with the industry looks weaker in terms of ROA, ROI, net margin, and gross margin, indicating less efficient conversion of revenue into bottom-line profit. ROE and return on tangible equity look better, but this is partly explained by the high financial leverage rather than purely by operational efficiency. The balance sheet remains under pressure: debt/equity is significantly above the industry median, debt is large, and current and quick liquidity are below comfortable levels. This means the company is sensitive to the cost of capital and interest rates, even if cash flow is generally stable. Dividend yield has declined over the years, removing part of the appeal for income investors. On the positive side, revenue and earnings have improved relative to weaker periods, and the company has maintained a large asset base and equity capital. But overall, the fundamentals support a cautious stance: the business is resilient, but the valuation no longer looks clearly attractive, and the debt profile and weak liquidity limit upside. For an investor, this is not a story of aggressive growth, but rather of a moderately high-quality asset that requires valuation discipline and has limited potential for multiple expansion.

Enbridge Inc

Сильный индекс, без изменений. Быки в растерянности.

Strong index, flat. The bulls are confused.

Сильный индекс, без изменений. Рынок на стороне быков.

Strong index, flat. The market is on the bulls' side.

Слабый индекс, незначительно упал. Приток средств в лонги остается на невысоком уровне.

Weak index, slightly down. The inflow of funds into longs remains at a low level.

Enbridge has strong scale and stable profitability, but its high valuation, large debt, and weak liquidity limit upside potential.

Key Points
Like automobile prices, car payments are now at record levels.
For investors with enough available cash, some dividend-paying stocks could cover these sky-high monthly payments.
While feasible, the idea isn’t necessarily advisable for most investors.
New cars have been uncomfortably expensive for a while now. Thanks to now-higher interest rates, however, payments on new automobiles have reached wildly high levels. Credit bureau Experian reports that the average payment on a new car stands at a shocking $765 per month.
For most households, buying a vehicle now means some pretty creative money management.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Here's an idea: Although it's certainly not what most people intended for their investment portfolios, why not use higher-yielding dividend stocks to help cover at least some of the cost of financing a new car?
Oil and gas pipeline operator Enbridge (NYSE: ENB) is a prime candidate. Its trailing dividend yield stands at 6%, based on a quarterly payment of $0.97 per share, or $3.88 per year. If you wanted to cover the entire monthly payment of $765 for a new car, you'd need nearly 2,366 shares of ENB, which would yield the $9,180 you'd need on a yearly basis to cover this cost. At today's prices, that's just over $109,000 worth of Enbridge stock.
Again, this isn't something that most investors were anticipating they might need to even consider doing just a few years ago. Desperate times call for creative thinking, though. At least with this scenario, you have the benefit of owning a stock that's now raised its annual dividend payout for 31 consecutive years.
The one idea that might not help as much as it has in the past? That's buying a used car. While they are cheaper, they're not leaps and bounds cheaper anymore. Experian's numbers say the monthly payment on the typical used car stands at $542. You'd still need 1,676 shares of Enbridge to cover these payments, which is nearly $77,500 worth of the stock at its price right now.
This arguably isn't the best all-around idea for actually funding the purchase of a new automobile, particularly if this money is earmarked for retirement.
Should you buy stock in Enbridge right now?
Before you buy stock in Enbridge, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Enbridge wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $361,650!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,437,517!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Experian Plc. The Motley Fool has a disclosure policy.

The Average Car Payment Is $765 a Month. How Much Enbridge Stock Do You Actually Need to Pay Your Car Payment Every Month?

Key Points
Oil is a notoriously volatile commodity.
Midstream companies charge fees for the use of their energy infrastructure assets.
Enterprise Products Partners, Enbridge, and Energy Transfer have big yields and reliable income streams.
The modern world isn't possible without energy, so every investor should probably have some exposure to the energy sector. The sector, however, is largely commodity-driven and highly volatile. But there is one niche of the broader energy sector that doesn't care if oil prices are $70 or $100: the Midstream. Here's why Enterprise Products Partners (NYSE: EPD), Enbridge (NYSE: ENB), and Energy Transfer (NYSE: ET) can reliably support yields of up to 6.7% regardless of what oil prices are doing.
Oil prices aren't doing anything unusual today
Oil prices are over $100 per barrel as of this writing. The cost of filling up your car with gas can be a bit of a shock, and is a very real example of the impact that high oil prices have on the economy. But if you look back at history, high oil prices aren't exactly unusual. The energy sector is known for its volatility, driven by factors such as geopolitical events, supply and-demand dynamics, industry disasters, natural disasters, and extreme weather.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
While today's high prices are unwelcome and a shock to the wallet, such volatility is normal in the energy sector. You can sidestep much of that volatility, however, by being selective about the dividend stocks you buy in the energy sector. The midstream segment of the broader industry is largely a toll-taker business, generating reliable fees to support robust dividends. It connects the upstream (oil drillers) to the downstream (chemical and refining) and to the rest of the world. In the midstream, demand for the services that pipelines, storage, and transportation assets provide is more important than energy prices.
3 high-yield midstream businesses to look at today
One of the best options in the midstream is master limited partnership Enterprise Products Partners. It has a 6% yield and has increased its distribution annually for 28 years. That's basically as long as Enterprise has been publicly traded. Although it serves a broad range of energy customers, conservatively run MLP has a strong focus on natural gas, an increasingly important fuel in the utility sector. With capital spending plans of $6.5 billion, Enterprise is leaning into demand to build more fee-generating assets to drive its slow and steady growth.
Enbridge is another solid choice, with a yield of roughly 6% and a dividend streak of 31 years. However, it is a bit unique in the midstream sector because its portfolio is broadly diversified. It owns material oil and natural gas pipeline assets, but it also operates regulated natural gas utilities and a small portfolio of renewable energy assets. All of its businesses generate reliable cash flows. That said, it tends to carry more leverage than other midstream operators because of the regulated utility assets it operates. On the positive side, the non-midstream assets add diversification, which will likely make Enbridge particularly interesting to risk-averse dividend investors.
Energy Transfer tops this list on yield, with a distribution yield of 6.7%. Distributable cash flow covered the distribution by over 2x in the second quarter of 2026, which is very strong. But that has to be juxtaposed against the fact that Energy Transfer cut its distribution in 2020, using the freed-up cash to reduce leverage. It was something of a business reset, with the company shifting toward a slow-and-steady growth profile. The distribution is growing again and is above its level prior to the cut. For more aggressive types, Energy Transfer's lofty yield could be of interest.
Three strong options for dividend investors
If you know you should have energy exposure in your portfolio, but just can't stomach the volatility of oil prices, the midstream is the place to be. With yields of up to 6.7%, Enterprise, Enbridge, and Energy Transfer are leading North American midstream businesses built on fee-producing infrastructure assets rather than commodities. Each has its own nuances to dig into, but all three are worth a close look regardless of how much volatile oil costs on any given day.
Should you buy stock in Energy Transfer right now?
Before you buy stock in Energy Transfer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Energy Transfer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $373,352!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,406,241!*
Now, it’s worth noting Stock Advisor’s total average return is 933% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 29, 2026.
Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

3 Dividend Stocks That Don't Care Whether Oil Is $70 or $100

Key Points
Williams Companies has increased its dividend by 162% over the past decade.
The company's dividend yield is at 3%.
Its shares are up more than 15% so far this year.
I'm a longtime investor in Williams Companies (NYSE: WMB), having bought the stock on three occasions since 2019. Based in Tulsa, it is one of the larger midstream energy companies, handling roughly one-third of all natural gas produced in the United States.
Williams operates key interstate transmission pipelines, including Transco, the nation's largest natural gas pipeline system by volume, as well as natural gas-gathering networks, processing plants, and storage facilities.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
The stock remains in my portfolio because of the company's solid performance. Its shares are up more than 130% in the last decade, not including dividends. If you had bought $10,000 worth of Williams Brothers stock when I did and reinvested the dividends, you would have $42,166.12 now.
That's a pretty good return, and while some investors might take the profits and run, I'm holding onto the stock. Here's why.
It has a dependable dividend
The yield on its dividend is 3% at its current share price, lower than the dividend yield of competitors such as Kinder Morgan or Enbridge. However, because of the company's more insulated cash-flow structure, it has boosted its dividend by more than 162% over the past decade, easily outpacing those two competitors.
The company raised its quarterly dividend by 5% this year to $0.525, the 10th consecutive year it has increased its dividend.
On an available funds from operations (AFFO) basis, the dividend is covered by 2.26x, as of the second quarter.
Its business is stable yet positioned for growth
Williams' pipeline footprint, particularly its Haynesville gathering assets and Transco Gulf Coast connections, directly links major gas basins to Gulf Coast export terminals. This positions the company as an indispensable beneficiary of the expansion of U.S. energy export infrastructure.
Global liquefied natural gas (LNG) volumes increased 5.4% to a record 56.3 billion cubic feet per day in 2025.
Williams' contracts are take-or-pay, meaning that power plants, utility companies, and gas producers pay the company either to take delivery of a minimum amount of a commodity, such as natural gas or pipeline capacity, or to pay a penalty if they don't take it.
In Q2, the company reported earnings per share (EPS) of $0.68, up 51%, year over year, and AFFO of $1.45 billion, up 10% over the same period a year ago. Revenue rose 9.7%, year over year, to $3.05 billion.
Data center power needs are driving orders
As of Q2, Williams had a $15.5 billion backlog of orders due to come online between 2027 and 2033. Electricity demand in the U.S. is accelerating rapidly due to data center expansions, artificial intelligence (AI) infrastructure, and industrial electrification.
Williams is expanding its power generation and corridor pipeline projects, with a six-gigawatt backlog of potential projects, to provide a steady, natural gas-backed electricity supply directly to utilities and high-demand energy customers.
The company has 10 project expansions along its Transco pipeline that are already under construction or have signed customer agreements.
Looking past the concerns
The stock is up more than 15% so far this year, and thanks to that, its valuation is high, more than 28 times forward earnings. That's high for a pipeline operator and well above the median for the energy midstream sector. If you look at its enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) ratio, it is trading at less than 17 times earnings, still higher than its peers but not out of line considering its growth prospects.
The company recently raised its long-term adjusted EBITDA target to a compound annual growth rate (CAGR) greater than 11% through 2030, driven by power expansion projects and major bolt-on acquisitions.
Even if the stock appears pricey at the moment, it is well positioned to justify its lofty valuation, particularly for long-term investors.
Should you buy stock in Williams Companies right now?
Before you buy stock in Williams Companies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Williams Companies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $383,680!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,382,954!*
Now, it’s worth noting Stock Advisor’s total average return is 937% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 28, 2026.
James Halley has positions in Enbridge, Kinder Morgan, and Williams Companies. The Motley Fool has positions in and recommends Enbridge and Kinder Morgan. The Motley Fool has a disclosure policy.

I Keep Adding to This Pipeline Stock. Here's Why the Yield Isn't the Only Reason.

Key Points
Enbridge has increased its dividend for 31 straight years.
Delek Logistics Partners has raised its distribution for 54 consecutive quarters.
Enbridge's high-yielding dividend is on a much stronger foundation than Delek's.
Enbridge (NYSE:ENB) and Delek Logistics Partners (NYSE:DKL) currently offer big-time yields. Enbridge is approaching 6%, while Delek is over 8%, each several multiples above the S&P 500. Both energy midstream companies have long records of increasing their high-yielding payouts.
Despite their solid growth records, only Enbridge is safe to buy. Here's why I think income-focused investors should buy that pipeline stock instead of its higher-yielding rival.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Image source: Getty Images.
Enbridge is as safe as it gets
Enbridge operates one of the most resilient business models in the energy sector. The company's diversified platform (liquids pipelines, gas transmission, gas distribution, and renewable energy) generates very stable revenue. It has more than 200 asset streams and businesses that derive more than 98% of their earnings from regulated rate structures or take-or-pay contracts with high-quality counterparties (over 95% investment grade). Enbridge's revenue is so predictable that it has achieved its financial guidance for 20 straight years. That includes two major recessions and several other oil market and economic upheavals.
The company also has a fortress financial profile. It has a strong investment-grade balance sheet and a conservative dividend payout ratio (60%-70%). That provides it with billions of dollars of annual investment capacity to fund expansion projects and acquisitions. Enbridge currently expects to grow its cash flow per share at around a 5% annual rate after next year, which should support continued dividend increases (31 straight years in Canadian dollars). These factors put the company's high-yielding payout on one of the safest foundations in the energy sector.
Delek Logistics: A higher-risk, high-yielding payout
Delek Logistics Partners also has a solid record of increasing its distribution. The master limited partnership (an entity that issues a Schedule K-1 Federal tax form each year) has raised its distribution for 54 straight quarters (13.5 consecutive years). That's an impressive streak, especially in the volatile energy sector.
Despite that, I have several concerns with Delek Logistics Partners. My biggest one is its weaker financial profile. The MLP has junk-rated credit, which significantly increases its borrowing costs. It also has a higher dividend payout ratio (75% during the first half of this year). That gives it less financial flexibility.
Delek Logistics also has a much less diversified business. About 30% of its earnings come from its parent company, refiner Delek U.S. Holdings. While that's down from 59% in 2023, that's still a lot of exposure to one customer, especially given Delek's sub-investment-grade credit rating. Delek Logistics also has a much less diversified business model, focusing on operating natural gas gathering and processing assets and crude oil logistics assets. While Delek Logistics has been investing to diversify away from its parent and into different areas (including water handling in recent years), it's much less diversified than Enbridge.
Enbridge is the much safer bet for a sustainable income stream
Delek Logistics has done a solid job growing its distribution despite its weaker financial profile and more concentrated business. However, it's still too high-risk for me. I'd much prefer the lower-risk, lower-yield dividend that Enbridge should continue to deliver even during turbulent times than to stretch for the higher-risk income stream currently offered by Delek Logistics.
Should you buy stock in Enbridge right now?
Before you buy stock in Enbridge, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Enbridge wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $383,680!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,382,954!*
Now, it’s worth noting Stock Advisor’s total average return is 937% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 27, 2026.
Matt DiLallo has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Delek Us. The Motley Fool has a disclosure policy.

1 High-Yield Dividend Stock Yielding Nearly 6% That's Safe to Buy -- and 1 Yielding Over 8% I Wouldn't Touch

Key Points
Enterprise Products Partners has a 5.7% yield and a 28-year distribution streak.
Enbridge has a 5.8% yield and a 31-year dividend streak.
Energy Transfer offers a 6.3% yield but requires a bit more investor trust.
Artificial intelligence (AI) is really just a fancy computer program. While much of the news focuses on the computer chips and data centers needed to support AI, that ecosystem doesn't work without electricity. Access to reliable power has been a major bottleneck in the AI build-out, with utilities and other power providers likely to benefit from a step change in electricity demand. But there's another step, seemingly outside of the electricity sector, that you should consider if you are a dividend investor: the midstream sector.
Businesses like Enterprise Products Partners (NYSE: EPD), Enbridge (NYSE: ENB), and Energy Transfer (NYSE: ET) have ultra-high yields and keep winning despite not providing power to AI companies. Here's why, with yields of up to 6.3%, you'll want to get to know these three midstream giants.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
What do midstream businesses do?
At their core, Enterprise, Enbridge, and Energy Transfer own the energy infrastructure that helps to move oil and natural gas around the world. They largely charge fees for the use of their assets, so the volumes they move are more important than the prices of the commodities being transported. Basically, they are service providers to energy companies in the upstream and downstream of the broader energy sector.
The truth is, Enterprise, Enbridge, and Energy Transfer are kind of boring. However, the fact that energy demand in the United States is expected to increase by 60% between 2025 and 2045 is a very big deal (for reference, demand increased by only 10% between 2005 and 2025). Natural gas, which is most efficiently moved by pipeline, is increasingly being relied on to generate electricity.
So, higher electricity demand will mean higher demand for natural gas. And that will lead to more volume moving through the pipelines owned by this trio of midstream giants. It also means that more pipelines will be needed, offering capital investment opportunities. And overseas demand for natural gas adds even more growth appeal to the story, since AI is a global phenomenon, not just a U.S. event.
Which midstream giant is right for your portfolio?
Enterprise Products Partners is a bellwether name in the midstream sector. The master limited partnership (MLP) has increased its distribution annually for 28 years and offers an attractive 5.7% yield. With slow and steady distribution growth in the low single digits, this financially strong business will likely be a good pick for conservative investors.
Enbridge is based in Canada and has a yield of 5.8%. Its dividend streak is up to 31 years, in Canadian dollars. The dividends U.S. investors receive will fluctuate along with exchange rates. It also has a more diversified portfolio than most of its pipeline peers, with regulated natural gas utilities and a small clean energy business in the mix. However, the really big difference here is that Enbridge is not an MLP. That means investors don't have to deal with a K-1, and it can be easily held in a tax-advantaged retirement account, such as an IRA. MLPs don't play nicely with tax-advantaged accounts. Like Enterprise, it is a conservatively managed business, so most investors will be comfortable owning it.
Energy Transfer is another MLP, but it has the highest yield on this list at 6.3%. For those looking to maximize the income their portfolios generate, it will be an attractive option. The caveat is that Energy Transfer cut its distribution in half during the COVID pandemic. The purpose was to strengthen the balance sheet, and that task has been completed. The distribution is growing again, with a low single-digit growth target. Moreover, the distribution is above its level prior to the cut and well covered by distributable cash flow. For more aggressive investors willing to overlook past transgressions, it could be worth a deep dive.
Who powers the power companies?
At the end of the day, high-yield midstream businesses like Enterprise, Enbridge, and Energy Transfer are still picks-and-shovels plays in the development of AI. Only, they don't directly support AI in any way; they support the power companies that support AI, effectively operating one step back from the action. If you are a dividend lover, these three energy players are worth a closer look right now, as electricity demand starts to take off.
Should you buy stock in Energy Transfer right now?
Before you buy stock in Energy Transfer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Energy Transfer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $387,158!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,365,749!*
Now, it’s worth noting Stock Advisor’s total average return is 932% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 20, 2026.
Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.

3 Dividend Stocks Sitting Outside the AI Power Trade -- And Still Winning

Key Points
Energy Transfer has a 6.3% yield, well supported by distributable earnings.
While I understand the investment's attractiveness, there's a history here that I can't get past.
If you are looking for reliable high yields in the energy sector, Energy Transfer (NYSE: ET) is likely to be high up on the list of options. And Wall Street really likes the stock, with 19 of the 21 analysts covering it rating it a buy or strong buy. And yet, I just can't get myself to buy it, instead owning lower-yielding Enbridge (NYSE: ENB). Here's why Energy Transfer's 6.3% yield, despite distribution coverage of 2.2x, isn't enough to get me to buy it.
Enbridge versus Energy Transfer
Before getting to Energy Transfer, I want to highlight some facts about Enbridge, the North American pipeline giant I actually bought. For starters, Enbridge's yield is 5.8%, roughly half a percentage point lower. That's a big difference, as buying Energy Transfer would increase my income stream by nearly 9%.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
I can totally understand where a dividend investor would buy Energy Transfer for the added yield. But there's a big difference when you consider dividend history. Enbridge has increased its dividend annually for 31 consecutive years. Energy Transfer cut its distribution in 2020 during the COVID pandemic, right when most investors would probably have preferred dividend consistency. To Energy Transfer's credit, it lived up to its promise at the time to reduce leverage and return to distribution growth. In fact, the distribution is now above its level prior to the cut. And the cut was probably the right decision to make for the business.
But that distribution cut was a hit for unitholders. And it comes after another questionable situation back during the 1996 energy market downturn. At that point, Energy Transfer agreed to buy peer Williams (NYSE: WMB), but got cold feet. In an effort to scuttle the deal, Energy Transfer issued convertibles that appeared to protect insiders from a dividend cut, if one were made. The Williams deal was canceled, and the convertibles never became an issue, but it raised material trust issues for me.
I'm erring on the side of caution with Enbridge
Enbridge has a better dividend history, and it doesn't have anything like the Williams debacle in its past. I'm more than happy to accept a lower yield if it means I don't have to constantly worry that management isn't putting me, the shareholder, first. That said, Energy Transfer has changed a lot in recent years, so I can see where more trusting investors would be willing to give the high-yield pipeline operator a second chance. I'm just not that person.
Should you buy stock in Energy Transfer right now?
Before you buy stock in Energy Transfer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Energy Transfer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $387,158!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,365,749!*
Now, it’s worth noting Stock Advisor’s total average return is 932% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 19, 2026.
Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool has a disclosure policy.

I Wouldn't Touch This 6.3%-Yielding Dividend Stock Right Now, Even Though Everyone Else Is Buying It.

Plains All American Pipeline, L.P. PAA announced that its wholly owned unit has entered into an agreement to acquire Silver Creek Midstream’s Powder River Basin assets for approximately $585 million in cash. The transaction is expected to close in the fourth quarter of 2026, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
PAA Acquisition to Strengthen Rockies Footprint
The Silver Creek assets will expand PAA’s Rockies footprint and increase its direct connectivity to crude oil producers in the Powder River Basin. The system provides access to Plains’ existing infrastructure through the Guernsey and Fort Laramie hubs and connects with long-haul assets delivering crude oil to Cushing.
The acquisition will add nearly 600 miles of crude oil gathering and transmission pipelines, more than 350,000 barrels per day of operating capacity and about 1.2 million barrels of storage capacity. It also includes a 49% non-operated interest in the Powder River Gateway joint venture, which includes the Iron Horse and Powder River Express systems.
The assets are supported by 915,000 dedicated acres, long-term acreage dedications and a weighted-average contract tenor of more than eight years. Current throughput is approximately 125,000 barrels per day, with potential for additional volume growth and operating synergies.
Earlier Acquisitions Continue to Deliver Synergies for PAA
PAA’s Cactus III acquisition expanded its crude oil footprint and pipeline capacity while strengthening connectivity across key producing regions. The asset also provides access to the Corpus Christi export market and has generated operational synergies and cost savings. PAA captured $50 million of targeted Cactus III synergies in 2026, while another $50 million of corporate efficiencies is expected by year-end. The company has identified an additional $50 million of efficiencies for 2027.
Strategic Acquisitions Drive Midstream Expansion
Strategic acquisitions expand midstream operations by adding high-quality assets, increasing processing and transportation capacity, and strengthening market reach. These transactions support scale, operational efficiency and long-term growth across producing regions. Apart from PAA, other oil and gas midstream companies are also broadening their footprint through acquisitions.
On Sept. 9, 2026, Enbridge Inc. ENB announced that its wholly owned unit agreed to acquire Tallgrass Energy’s crude oil business for $2.55 billion in cash. The transaction is expected to close later in 2026, subject to customary closing conditions and regulatory approvals. The ENB deal complements PAA’s acquisition, with both expanding Rockies crude infrastructure. ENB will acquire 51% of Powder River Gateway, while PAA will acquire the remaining interest.
On Sept. 3, 2026, Williams WMB completed its $5.5-billion acquisition of Momentum Midstream, adding more than 4,000 miles of pipelines, 6 billion cubic feet per day (Bcf/d) of gathering capacity and 4.05 Bcf/d of transportation capacity in the Haynesville.
On June 11, 2026, Western Midstream WES completed its $1.6-billion Brazos Delaware acquisition, adding about 470,000 dedicated acres and 460 million cubic feet per day of processing capacity while expanding its Delaware Basin gathering and processing footprint.
Unit Price Movement of PAA
In the past three months, units have rallied 17.8% compared with the industry’s 8.7% growth.
PAA’s Zacks Rank
Plains All American Pipeline currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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PAA Plans to Expand Rockies Presence With Silver Creek Acquisition

One of our favorite pipeline plays--Enbridge (ENB)--has taken a tumble. It's set up a sweet buying opportunity.
We can thank rising rates (with an "assist" from overdone trade war fears!) for this opening.
Here's the state of play with this one, which I've nicknamed the "natty" king because, despite its Canadian domicile, it ships 20% of the natural gas consumed in the US.
The stock yields a gaudy 5.6%.
Enbridge is a "toll booth" on North American energy consumption, collecting fixed rates for the use of its pipelines and storage facilities, no matter what oil and gas prices do.
The stock has returned 56% for us since we bought it in March 2023.
Its payout has jumped 77% in the last decade (more on that below).
Right now, the natty king is showing an attractive blend of strength and value. Even with that 56% total return, the stock is still down--off 16% on a price basis from its May highs. That's a big part of our opportunity here:
The "Natty" King's (Temporary) Fall
Beyond rates, some investors see the company as a potential trade-war victim. That's in part because Enbridge is also a major oil shipper: Its 8,600-mile Mainline system, an important part of its operations, ships Canadian crude to refineries in the US Midwest.
But these folks are missing the point. For one, to date, oil and gas have been exempted from the trade spat.
That's by design: The administration doesn't want to raise fuel costs, and the Canadian side doesn't want to antagonize its resource-producing western provinces. Plus, those Midwest refineries are set up to process Canadian "heavy" crude, and that can't be easily changed.
Yes, Venezuela produces a crude similar to Alberta's. But as we discussed last week, the country's battered oil infrastructure needs many years, and billions of dollars, of investment.
As I write this, Enbridge's project backlog has grown to $41 billion Canadian . And it's deploying $10 billion Canadian in growth capital this year alone. Current projects stretch into the 2030s.
It's already making news on this front: Last Thursday, Enbridge announced a US$2.55-billion deal to buy a 75% stake in the 1,050-mile, 460,000-barrel-per-day Pony Express pipeline, which ships crude from the US Rockies to the key storage hub at Cushing, Oklahoma.
The deal also covers 51% of the Powder River Gateway system, which can ship up to 240,000 barrels a day, as well as other storage and marketing assets.
It's a cash deal, but the company will come up with some of the purchase price through a C$2.6-billion share offering. The resulting dilution prompted a selloff last week. We're fine with that, as Enbridge expects the deal to add to its cash flow right away, after it expects to close the deal later this year (pending regulator sign-off, of course).
Finally, Enbridge said CEO Greg Ebel will retire December 31. Michele Harradence, who's been with the company since 2014 and is now president of Enbridge's gas-distribution and storage operation, will take over. Her familiarity with the business (and the fact that Ebel will advise her until next May) tees up a smooth transition.
Steady Payout Growth, With a Potential Currency "Kicker"
Now let's talk dividends. Earlier this year, the company treated us to a payout hike--its 31st consecutive increase.
And that payout is well-covered, with Enbridge kicking out $3.88 (Canadian) in annualized dividends and guiding to$5.70 to $6.10 in distributable cash flow per share in 2026. The midpoint of that estimate translates to 66% of DCF going out as dividends--very reasonable for a "toll booth" like ENB.
Take a look at this payout picture--I'm sure you'll see something interesting (beyond the rarity of a 5.6%-yielding stock hiking payouts 77% in 10 years):
As a Canadian company, Enbridge issues dividends in "loonies" (shorthand for the country's loon-emblazoned one-dollar coin). That's why you don't see the clean "dividend staircase" we're used to in our stocks.
As a result, the US dollar's strength versus the loonie weighs on our payouts. But that could be a plus in the long run. Here's why: In the US, the Fed's target range is 3.5% to 3.75%, compared to the Bank of Canada's 2.25% policy rate. The gap between the two central banks' rates is a big reason for the greenback's strength versus its Canadian cousin.
The Iran situation is a driver of inflation in both countries. But it will end at some point. When it does, the Fed will have more room to cut than the Bank of Canada, by virtue of its higher "starting point."
As rates fall, they should put upward pressure on shares of "bond proxy" utilities and pipelines. They could also weigh on the greenback, potentially boosting our dividends when they're converted to US dollars.
To be sure, the trade war could push rate cuts down the road, but we're fine with that: While we wait, we're locking in Enbridge's 5.6% payout.
(One thing to note before I wrap up here: Since Enbridge is a Canadian company, US investors face different tax treatment in the form of 15% withholding on dividends, though an offsetting tax credit may be available. This explainer lays out the details.)
Where does all this leave the natty king? While the rest of the world gets riled up by the headlines, Enbridge hardly notices. It simply goes on quietly collecting tolls on the rising tide of oil and gas flowing through its pipes.
Enbridge Pays Us 5.6%. This One Yields 12% (and Pays Monthly)
As I just said, Enbridge is a top play on overdone fears around trade and rates. The stock's payout growth lets us build on the 5.6% dividend on a buy made now.
In short, the Canadian "natty king" is one of those stocks you can buy now and lock away forever.
It's not the only one.
The other top pick I want to tell you about now fits that mold also. It's a special type of fund that pays high dividends--this one yields 12% now, with payouts rolling our way monthly.
This fund is so unloved (thanks, again, to overdone, short-term thinking around rates) that it's trading well below the value of its underlying holdings. Buy now and you lock in that 12% payout ($12,000 in yearly dividends on every $100K invested) and position yourself for price gains as rates eventually move lower.
In the meantime, we're happy to wait--especially as we're getting a 12% payout while we do!
Click here and I'll tell you more about this 12%-yielding pick and give you a free Special Report that unmasks it. You get its name, ticker, a full breakdown of its holdings, the scoop on its manager (who was previously named Fund Manager of the Year by Morningstar) and more.
Further ENB Research:

5.6% Dividends. 31 Straight Hikes. A 16% "Discount" (Thank the Trade War)

Monday, September 14, 2026
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Walmart Inc. (WMT), UnitedHealth Group Inc. (UNH) and Wells Fargo & Co. (WFC), as well as two micro-cap stocks XMax Inc. (XMAX) and Interlink Electronics, Inc. (LINK). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Ahead of Wall Street
The daily 'Ahead of Wall Street' article is a must-read for all investors who would like to be ready for that day's trading action. The article comes out before the market opens, attempting to make sense of that morning's economic releases and how they will affect that day's market action. You can read this article for free on our home page and can actually sign up there to get an email notification as this article comes out each morning.
You can read today's AWS here >>> Pre-Markets Lower on AI Concerns, Iran War
Today's Featured Research Reports
Walmart’s shares have outperformed the Zacks Retail - Supermarkets industry over the past year (+4.2% vs. +3.1%). The company’s scale, value positioning and integrated omnichannel model provide a strong foundation for sustained growth. Traffic and market-share gains remain healthy, while e-commerce, marketplace, advertising and membership are expanding the revenue mix and improving digital economics.
International operations and Sam’s Club add further diversification. However, elevated operating costs, pharmacy-related sales pressure and heavy capital spending can limit earnings leverage and free-cash-flow conversion.
Continued price reinvestment supports customer loyalty and share gains but may restrain margin expansion, while currency swings can add volatility. While Walmart’s fundamentals remain resilient, stronger returns will depend on disciplined execution, productivity gains and successful monetization of its expanding retail ecosystem.
(You can read the full research report on Walmart here >>>)
Shares of UnitedHealth have gained +11.1% over the past year against the Zacks Medical - HMOs industry’s gain of +14.9%. The company’s improving medical-cost trends helped strengthen its performance. Optum remains a key growth driver through its pharmacy services, technology integration, and government solutions.
A strong market position, ongoing expansion initiatives, and rising healthcare demand support long-term growth. Fee-based commercial membership remained on a growth path despite elevated medical costs. The higher-than-expected 2027 Medicare Advantage payment rate increase provides additional support for growth.
The company raised its 2026 adjusted EPS outlook to $19.50-$20.00. Robust cash generation supports shareholder returns and financial flexibility, with operating cash flow up 57.9% YoY in the first half of 2026. The Zacks Outperform recommendation reflects UNH's attractive growth prospects and meaningful upside potential from current levels.
(You can read the full research report on UnitedHealth here >>>)
Wells Fargo’s shares have gained +13.3% over the past year against the Zacks Financial - Investment Bank industry’s gain of +22.8%. The company’s earnings beat estimates in three of the trailing four quarters. The removal of the asset cap is expected to enable the company to further expand deposits, grow its loan portfolio and scale its fee-based businesses.
The planned launch of tokenized deposits could strengthen its transaction-banking capabilities. A strong capital and liquidity position supports shareholder returns, including the latest 11% dividend hike post-clearing the 2026 Fed stress test. Investments in technology, along with continued branch optimization, are likely to aid its long-term growth.
However, net interest income (NII) growth will likely remain under pressure in the near term, weighing on revenues. Further, its mortgage banking income remains weak amid ongoing volatility in mortgage rates.
(You can read the full research report on Wells Fargo here >>>)
XMax’s shares have outperformed the Zacks Furniture industry over the past year (+67.3% vs. -23.7%). This microcap company with a market capitalization of $551.67 million has transitioned toward AI, creating a new avenue for growth as commercialization of its API platform begins, supported by stronger liquidity and its furniture business. Private technology investments may offer long-term value creation.
However, the investment case remains execution dependent. The core furniture business continues to face demand pressure, while AI operations are still at an early stage of profitability and require effective cost control and customer scaling.
Negative operating cash flow, weak receivables conversion, customer and supplier concentration, potential share dilution and dependence on unrealized investment gains add uncertainty. The current valuation suggests investors are assigning significant value to the AI strategy and future growth, leaving limited room for execution shortfalls or slower-than-expected commercialization.
(You can read the full research report on XMax here >>>)
Shares of Interlink Electronics have gained +50.5% over the year-to-date period against the Zacks Electronics - Miscellaneous Services industry’s gain of +85.1%. This microcap company with a market capitalization of $92 million saw its first-half 2026 gross profit rise 20.9%, gross margin expand to 44.0% from 40.9%, and the net loss narrow sharply to $0.1 million from $0.7 million.
Medical and standard-product revenues grew 30.5% and 34.8%, respectively, broadening the revenue base, while acquisitions, cross-selling, long-lived design wins and exposure to expanding sensing markets provide additional growth avenues. Acquired businesses have also shown meaningful margin improvement, supporting scalability.
However, customer concentration remains high, industrial revenue fell 18.8% in the first half of 2026, and Q2 gross margin slipped slightly year over year amid an unfavorable product mix. Rising SG&A costs, lower R&D spending and regulatory and supply-chain exposure could also limit operating leverage. Valuation is mixed, with EV/sales below industry and sector levels but price/book above key benchmarks.
(You can read the full research report on Interlink Electronics here >>>)
Other noteworthy reports we are featuring today include Enbridge Inc. (ENB), Emerson Electric Co. (EMR) and Hewlett Packard Enterprise Co. (HPE).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Walmart (WMT) Gains From Advertising & Membership Businesses
Featured Reports
Contracted Cash Flows & Growth Projects to Benefit Enbridge (ENB)
Per the Zacks analyst, contracted cash flows, liquids growth and visible projects support ENB's earnings, while policy uncertainty, delayed commitments, financing needs and valuation pose risks.
Intelligent Devices Group Aids Emerson (EMR), High Debt Ails
Per the Zacks analyst, Emerson's Intelligent Devices group is driven by strength in the final control and measurement & analytical segments. High debt level remains concerning for the company.
Pricing Power Benefits Republic Services (RSG) Amid High Debt
Per the Zacks analyst, Republic Services' price hikes without eroding economic benefit to inflation reinforce its competitive position. However, a high debt level could constrain capital allocation.
Realty Income (O) Gains From Scale, Diversification Amid High Debt
Per the Zacks analyst, Realty Income benefits from portfolio scale, diversification and broad funding access. However, high debt, rising interest costs and retail concentration may weigh on returns.
Data Center Demand & Grid Investments Aid DTE Energy (DTE)
According to the Zacks analyst, DTE Energy benefits from rising data center and renewable demand, alongside a $36.5B 2026-2030 capital plan focused on grid reliability and clean generation.
Epic Pass & Technology Investments Aid Vail Resorts (MTN), Demand Ails
Per the Zacks analyst, Vail Resorts benefits from its integrated resort network, recurring Epic Pass model and technology investments. However, weaker visitation and pass demand remain concerns.
Exparel Sales Fuel PCRX's Growth Prospects, Overdependence a Woe
Per the Zacks Analyst, Pacira benefits from Exparel strength and portfolio diversification, while patent, pipeline, concentration and debt risks remain key concerns.
New Upgrades
Robust Server Demand Aids Hewlett Packard's (HPE) Prospects
Per the Zacks analyst, Hewlett Packard Enterprise is benefiting from growing server demand as enterprises and cloud service providers aggressively increase investment in AI-optimized systems.
Celestica (CLS) Rides on Strength in AI Infrastructure Vertical
Per the Zacks Analyst, robust AI-driven demand across data center and cloud markets will likely drive Celestica's top line. Strong growth in cash flow is a positive.
Amkor Technology (AMKR) Rides AI Packaging and Capacity Growth
Per Zacks Analyst, Amkor Technology is poised to benefit from accelerating AI and HPC Packaging Demand, advanced product growth, strategic partnerships and regional capacity expansion.
New Downgrades
Macy's (M) Witnesses Consumer, Tariff & Competitive Headwinds
Per the Zacks analyst, Macy's has been witnessing fragile discretionary demand, tariff and fuel costs, intense competition and uneven second-half growth despite raised fiscal 2026 guidance.
Victoria's Secret's (VSXY) Rising SG&A Could Pressure Margins Further
Per the Zacks analyst, Victoria's Secret's higher marketing and customer-focused investments could increase SG&A pressure, potentially weighing on margins despite efforts to drive growth.
QuidelOrtho (QDEL) Faces Solvency Issues, Competition & Policy Risk
Per the Zacks Analyst, QuidelOrtho (QDEL) faces stiff competition, weak solvency, and reimbursement uncertainties, though strong product sales and lab potential offer cautious optimism.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners Up
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XMax Inc. (XMAX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).

Top Analyst Reports for Walmart, UnitedHealth & Wells Fargo

Key Points
I eventually want to live off the income my portfolio generates, so I focus on dividend stocks.
Like Warren Buffett, I'm comfortable holding cash until an attractive investment arises.
My portfolio spans multiple sectors and includes a reasonable number of stocks, with pooled investment products further diversifying my holdings.
To summarize my investment approach, I prefer to buy companies with long histories of dividend increases and historically high yields. Those two traits don't come around all that often, and sometimes I find clusters of stocks in specific sectors. I need to think specifically about diversification, one of the simplest and most effective ways to reduce risk. Here's how I've done it as I've built my portfolio of around 34 investments.
How many stocks do you need to be diversified?
The Motley Fool recommends that investors own 50 stocks. That's a perfectly fine number, but also a lot of work. And just owning 50 stocks doesn't actually mean you are diversified. You could own 50 technology stocks, for example, which would leave you with exposure to just a single sector. That's not diversification. Diversification is really about owning a reasonable number of investments across a wide range of sectors and asset classes.
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My first step toward diversification was to take an honest look at what I want to achieve and what I'm capable of. My goal is a mixture of income and capital appreciation. I am fairly confident in my ability to select dividend stocks, though every investor makes mistakes from time to time, and I know I can only juggle so many stocks at once. In other words, 50 stocks are too many for me, so a core part of my diversification strategy is to outsource some of my work.
For example, I own two Baron mutual funds to gain exposure to growth stocks and smaller companies. I own several closed-end funds: one focused on healthcare stocks with an option income overlay, one investing in convertible securities, and one with a broadly diversified dividend portfolio. And I own three exchange-traded funds: one with an option income focus and two that use very different screening approaches to pick dividend stocks.
This collection of investments includes hundreds of stocks across a wide range of sectors (and convertible bonds), materially adding to my diversification. And many of these pooled investments do things I either don't want to do myself because they are time-consuming (such as an option income strategy) or don't think I can reasonably do myself (such as investing in healthcare and small growth stocks). With my foundation spread widely across sectors, investment approaches, and a large number of stocks and convertible bonds, I can comfortably invest in individual stocks knowing I have a diversified foundation to work from.
Step two is focusing on what I can do: Dividend stocks
My preference is to buy companies that have impressive histories of increasing their dividends and yields that are historically high. I dig deeply into the companies I am considering and only buy when I believe the business is worth owning. Some of the stocks that have made the cut include Realty Income (NYSE: O), PepsiCo (NASDAQ: PEP), Black Hills (NYSE: BKH), and Enbridge (NYSE: ENB).
Stepping back, that's a real estate investment trust, a consumer staples giant, a regulated utility, and a North American pipeline giant. Because of my pooled investments, I don't worry too much about overlaps, but I also make sure to buy stocks across various industries. For example, I own several REITs, several consumer staples companies, and a couple of energy stocks and utilities. These are areas where income opportunities often arise, so I have to go where the dividends are, while still working to keep the portfolio spread across various sectors.
Notably, when I buy a stock, I invest a specific dollar amount. Basically, I have a position size that I want to build. Once I build to a full position, I don't add to it. That may limit my upside, but it also means my downside risk is limited.
What's also notable here is that I try to buy when a stock has a historically high yield. For example, despite a long and successful history, PepsiCo isn't currently performing very well as a business. I believe the Dividend King, with over 50 annual dividend increases, will get back on track. But Wall Street is downbeat on the stock, pushing the yield above 4%. It was an opportunistic purchase I was prepared to jump on because if I can't find something I want to buy, I'm happy to hold cash. Warren Buffett uses a similar approach, so I'm not going out on a limb here. And cash is the ultimate "safe" investment, though inflation erodes its value over time. Still, I usually have cash on hand because I prefer to be highly selective about which companies receive my capital.
The big takeaway is to know your limitations
Diversification is important, and it is fairly easy to do if you take the time to consider how many baskets you are capable of dealing with at one time. I know I can't do everything all at once, so I've outsourced aspects of my portfolio while continuing to do the things that I enjoy and believe I'm good at. This allows me to focus my energy where it is likely to produce the best results. And if I can't "find" an investment, I don't force myself to find one just to say I'm doing something. I only make a move when I have a strong conviction, knowing that cash is a safe-haven investment that provides me with material flexibility in both good markets and bad ones.
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Reuben Gregg Brewer has positions in Black Hills, Enbridge, PepsiCo, and Realty Income. The Motley Fool has positions in and recommends Enbridge and Realty Income. The Motley Fool has a disclosure policy.