Should You Buy Enbridge Stock for Its 7.1% Yield?

When a dividend stock falls in value, it can give investors some incentive to load up on it. That's because, assuming its business remains in good shape, not only might it be a good cheap buy, but it will also pay a better-than-normal yield.

Pipeline company Enbridge (TSX:ENB)(NYSE:ENB) potentially falls into that category. Declining oil prices and an ongoing dispute related to its Line 5 pipeline are a couple of the main reasons as to why investors have become bearish on the stock of late. Year to date, Enbridge's stock is down around 5% and it is near its 52-week low.

The company recently reported its first-quarter earnings, which proved to be both strong and consistent with Enbridge's adjusted earnings of $1.7 billion being the same as what they were in the previous year. Cash flow from operating activities also totaled $3.9 billion versus $2.9 billion a year ago. There weren't any big red flags on the company's earnings report but nonetheless the stock has failed to gain much traction this year.

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Enbridge stock currently pays a dividend yield of 7.1%, which is well above the S&P 500 average of 1.7%. On a $25,000 investment in Enbridge, that means you could be earning approximately $1,775 in dividends over the course of a full year. And with the company having a strong track record for increasing its payouts, odds are that dividend income will also rise over time.

Enbridge is a safer stock than other oil and gas stocks and with the company reaffirming its guidance this year and things still looking good for the business, this can be a great stock to add to your portfolio today.