Enbridge Has Secured Over $28 Billion of Growth Capital Projects. Here's Why Dividend Investors Should Care.

Enbridge (NYSE: ENB) is one of North America's largest energy infrastructure companies, operating in the midstream part of the ecosystem, which is responsible for transporting and storing oil, natural gas, and other energy products.

At the end of the first quarter, Enbridge served over 75% of North American oil refineries, transported 20% of all natural gas consumed in North America, and served over 7 million utility customers. It might not be a household name, but it's an important part of the country's energy infrastructure, and its growth will continue as its project backlog expands.

Image source: The Motley Fool.

Enbridge has plenty of future commitments locked in

Enbridge's growth capital backlog is essentially its to-do list of projects. The company has committed to the projects, but they haven't been fully completed or put into service yet. Enbridge's backlog currently includes the following:

• Expanding its current natural gas and liquids pipelines
• Developing utility networks
• Developing offshore wind farms
• Improving its carbon capture and storage abilities

A backlog may not be ideal from a short-term standpoint, but it's a visible way for investors to assess Enbridge's future revenue. And given that much of the appeal of Enbridge's stock lies in its dividend, it should be reassuring to investors that the company continues to secure cash-generating projects.

Enbridge's dividend works a bit differently from that of U.S. companies

Typically, when a company declares a dividend amount, you know that's the exact amount you can expect. If it's $1 quarterly, you can expect $1 paid out.

Enbridge is a Canadian company, so it pays dividends in Canadian Dollars (CAD), but when it pays them out to American investors, it automatically converts them to USD. Since the CAD-USD exchange rate fluctuates, the exact dividend payout amount will vary. It's likely not by much, but it will fluctuate nonetheless.

You should also expect the dividend to be subject to a 15% upfront withholding tax in Canada, but you can recoup it on the back end by claiming the Foreign Tax Credit (IRS Form 1116), which will reduce your tax liability by the amount Canada withheld. This prevents you from paying taxes twice on the dividend you receive.

ENB Dividend data by YCharts

Know what you are and aren't getting with Enbridge's stock

Enbridge isn't a stock you should buy expecting consistent market-beating returns (although it is outperforming the S&P 500 this year through July 11), but it's hard to deny its effectiveness as a reliable income source. It has increased its annual dividend for 31 consecutive years, and with its current backlog and growth capital projects, I don't see that streak ending anytime soon.

The company has a minor red flag -- its high debt -- but that isn't an issue that should cause investors to lose sleep. It remains a great buy for income investors and has plenty of cash flow to remain shareholder-friendly.

Stefon Walters 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.