Want $1,000 in Annual Passive Income? Invest This Much in This Ultra-High-Yield Energy Stock.
Key Points
Pipeline stocks generate high levels of distributable cash.
Income investors should consider one of the biggest pipeline stocks in the world.
- 10 stocks we like better than Enbridge ›
Generating $1,000 in annual passive income may be easier than you might expect. Assuming a 5% annual dividend, investors would need just $20,000 to generate this level of income.
These figures don't include any potential taxes. Nor do they adjust for inflation. But a 5% annual dividend is all you need to start building a passive cash flow empire.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
If you're looking for passive income, one pipeline stock could have you completely covered.
This 5% dividend stock is all you need for passive income
Pipeline stocks like Enbridge (NYSE: ENB) are ideal investments for generating passive income. Pipelines are like toll roads for energy sources like natural gas and crude oil. These networks often cost billions to construct, but once in place, cash flow tends to be high, with revenue often collected on a usage basis, just like toll roads.
Image source: Getty Images
Enbridge operates one of the largest fossil fuel transportation and pipeline networks in North America. In many cases, its network can be thought of as a monopoly. That is, it's very expensive and difficult for competing networks to be built nearby, improving both pricing power and volume stability.
Right now, Enbridge stock offers a yield of around 5%, plenty for starting a passive income stream. What's more, the company has had a steady payout for over 70 years. Over the last three decades, the payout has increased by an annual average of 9%.
Enbridge isn't a perfect stock. It has relatively high levels of debt and capital expenditure requirements. Plus, it is exposed to regulatory and social headwinds related to fossil fuel use.
But Enbridge's business continues to generate high levels of distributable cash to support a large and growing dividend. In my mind, it's almost a must-own for income investors.
Should you buy stock in Enbridge right now?
Before you buy stock in Enbridge, consider this:
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*Stock Advisor returns as of July 9, 2026.
Ryan Vanzo 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.
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