Enbridge: Triple Your Retirement Income With This 6.4% Yielding Dividend Aristocrat

Enbridge: Triple Your Retirement Income With This 6.4% Yielding Dividend Aristocrat


Record-low interest rates and a 29% overvalued stock market mean that a 60/40 retirement portfolio could deliver -1.3% annual income growth during retirement and a steadily lower standard of living.

Thankfully, high-yield dividend aristocrat ENB can help you more than triple your retirement income, retire rich, stay rich in retirement, and help your kids retire even richer.

ENB is the industry leader in transitioning to renewable energy. It has a $10 trillion growth opportunity in offshore wind alone.

The bond market is willing to lend to ENB for 90 years, meaning the smart money on Wall Street thinks ENB will likely survive and thrive for at least another century.

ENB is trading at 8.8X cash flow, pricing in 0.2% long-term growth. Management says it can grow at 5% to 7% for decades, and analysts think it will grow at 8.4%. ENB offers 12.4% long-term total return guidance, 25% more than the S&P 500, and 3X the risk-adjusted expected returns over the next five years.

This idea was discussed in more depth with members of my private investing community, The Dividend Kings. Learn More »

AscentXmedia/E+ via Getty Images Do you dream of a comfortable or even rich retirement? One in which you can live entirely off generous, very safe, and steadily growing dividends? I know I do, and it’s a beautiful dream shared by millions of my fellow SA readers and Dividend Kings members.

Unfortunately, interest rates are at their lowest levels in history. Worse yet, while economists do expect long-term interest rates to normalize eventually, that means a return to about 2.5% on the 10-year treasury yield, similar to the 2.4% average we saw in the 2010s.

In other words, low rates are like here to stay, at least for the foreseeable future.

What does that mean for your retirement dreams? Investment Strategy Yield LT Consensus Growth LT Consensus Total Return Potential Long-Term Risk-Adjusted Expected Return Long-Term Inflation And Risk-Adjusted Expected Returns Enbridge (Analyst Consensus) 6.4% 8.4% 14.8% 10.4% 8.1% Enbridge (Management Guidance) 6.4% 6.0% 12.4% 8.7% 6.4% Safe Midstream 6.1% 6.2% 12.3% 8.6% 6.4% Safe Midstream + Growth 3.3% 8.5% 11.8% 8.3% 6.0% High-Yield 2.8% 11.2% 14.0% 9.8% 7.6% Dividend Aristocrats 2.3% 8.9% 11.2% 7.9% 5.6% Value 2.1% 11.9% 14.0% 9.8% 7.6% 60/40 Retirement Portfolio 1.9% 5.1% 7.0% 4.9% 2.7% REITs + Growth 1.8% 8.9% 10.6% 7.4% 5.2% High-Yield + Growth 1.7% 11.0% 12.7% 8.9% 6.6% 10-Year US Treasury 1.52% 0.0% 1.5% 1.5% -0.7% S&P 500 1.4% 8.5% 9.9% 7.0% 4.7% Nasdaq (Growth) 0.7% 10.9% 11.6% 8.1% 5.9% Chinese Tech 0.3% 12.0% 12.3% 8.6% 6.4% (Sources: Morningstar, FactSet Research, YCharts)

If you own bonds, it means negative real returns. If you own a standard 60/40 retirement portfolio, it means risk and inflation-adjusted expected returns of just 2.7%.

That’s 70% lower inflation-adjusted 60/40 returns than we’ve seen over the last decade.

Here’s a troubling fact that you need to know. The 4% rule requires at least 4% long-term inflation-adjusted returns in order to ensure stable retirement income that never runs out.

In other words, if you are relying on a traditional retirement portfolio to fund your expenses during your golden years, well then, your golden years might not be so golden.

In fact, your annual income in retirement will fall 1.3% annually and, by the end of a 30-year retirement, would be 33% less than when you started.

Does the prospect of steadily falling standards of living in retirement sound appealing to you? I’m guessing no.

It doesn’t sound appealing to pension funds either who generally target 7.5% long-term annual returns.

The S&P 500’s long-term risk-adjusted expected returns are 7.0%This means even a 100% stock portfolio likely can’t help pensions hit their return targets, and thus, the investments in alternatives like hard assets (infrastructure and real estate).But that brings me to Enbridge ( ENB ), a 6.4% yielding Canadian dividend aristocrat that can help you retire rich, stay rich in retirement, and potentially allow your children and grandchildren to retire even richer.In fact, Enbridge can potentially help boost your retirement income by 240% right away, compared to a 60/40, and could just be what your diversified and prudently risk-managed retirement portfolio needs right now.So, let’s take a look at the three reasons I’ve invested $70,000 into Enbridge (and counting) and why you might want to consider buying this Ultra SWAN quality aristocrat as well. Reason One: Impeccable Quality, Safety, And Dependability The Dividend King’s overall quality scores are based on a 207 point model that includes dividend safety balance sheet strength short and long-term […]

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