Want $1,000 in Annual Passive Income? Invest This Much in This Ultra-High-Yield Energy Stock.
Generating $1,000 in annual passive income may be easier than you might expect. Assuming a 5% annual dividend, investors would need just $20,000 to generate this level of income.
These figures don’t include any potential taxes. Nor do they adjust for inflation. But a 5% annual dividend is all you need to start building a passive cash flow empire.
If you’re looking for passive income, one pipeline stock could have you completely covered.
This 5% dividend stock is all you need for passive income
Pipeline stocks like Enbridge (ENB 0.87%) are ideal investments for generating passive income. Pipelines are like toll roads for energy sources like natural gas and crude oil. These networks often cost billions to construct, but once in place, cash flow tends to be high, with revenue often collected on a usage basis, just like toll roads.
Image source: Getty Images
Enbridge operates one of the largest fossil fuel transportation and pipeline networks in North America. In many cases, its network can be thought of as a monopoly. That is, it’s very expensive and difficult for competing networks to be built nearby, improving both pricing power and volume stability.
Right now, Enbridge stock offers a yield of around 5%, plenty for starting a passive income stream. What’s more, the company has had a steady payout for over 70 years. Over the last three decades, the payout has increased by an annual average of 9%.
Today’s Change
(-0.87%) $-0.48
Current Price
$54.59
Key Data Points
Market Cap
Day’s Range
$54.56 – $55.25
52wk Range
$43.59 – $58.45
Volume
5.3M
Avg Vol
4.4M
Gross Margin
30.95%
Dividend Yield
5.03%
Enbridge isn’t a perfect stock. It has relatively high levels of debt and capital expenditure requirements. Plus, it is exposed to regulatory and social headwinds related to fossil fuel use.
But Enbridge’s business continues to generate high levels of distributable cash to support a large and growing dividend. In my mind, it’s almost a must-own for income investors.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge. The Motley Fool has a disclosure policy.
