Enbridge Inc.

01/22/2015 7:00 am EST


Gordon Pape

Editor and Publisher, The Income Investor and the Internet Wealth Builder

The plunge in oil prices was far and away the most important financial development of the past year. And it came out of nowhere, the classic black swan, explains Gordon Pape, editor Internet Wealth Builder.

Until late summer, prices were firmly above US$100 a barrel. There had been some softening but nothing too significant. Then, over the space of a couple of months, the market went into a selling frenzy and we're still searching for a bottom.

This story isn't over by any means. Some analysts believe the price war will continue for at least the next year as the Saudis try to put pressure on US shale oil producers (and oil sands producers by extension) in an effort to slow down production. As such, energy could also turn out to be the top story of 2015.

Nevertheless, our favorite conservative investment idea for the new year is Enbridge Inc. (ENB).

This pipeline and natural gas distribution giant is a staple company with a long reputation for dividend increases and share price appreciation, but even it could not avoid the carnage.

Any company associated with the energy sector has seen its share price hit as oil prices plunged.

The stock was recently down about 11% from its 52-week high, despite the fact the company recently announced a whopping 33% dividend increase.

At the new rate, the shares yield a generous 3.2%, plus there’s a good chance the stock will regain its 2014 high of $57.19 before the year is out.

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