Enbridge: I'd Like To Lock In A 7.4% Preferred Dividend Yield

Core Viewpoint - Enbridge's preferred shares are being highlighted as a safer investment option within the fixed income portfolio, especially given the recent preferred dividend reset and the company's Q2 results [2][3]. Financial Performance - Enbridge reported total revenue of C$11.3 billion for Q2 2024, marking a 9$2.27 billion [4][5]. - The company achieved a net profit of C$2 billion, stable compared to the previous year, with C$1.94 billion attributable to equity holders [6][9]. - The distributable cash flow (DCF) for Q2 was C$2.86 billion, resulting in a DCF per share of C$1.34, while the first half of the year saw a DCF per share of C$2.97 [9][11]. Preferred Shares Overview - Enbridge's Series 3 preferred shares will have a new preferred dividend rate of 5.288% starting September 1, 2024, until August 2029, based on the five-year Canada government bond yield plus a 238 basis point markup [14][17]. - The Series 3 preferred shares are currently trading at a significant discount to par, offering an implied yield of 7.3% for the next five years [15][18]. - The company requires less than 10% of its profit to cover preferred dividends, indicating a strong coverage ratio for preferred shareholders [7][11].