At first glance, Enbridge (NYSE: ENB), Procter & Gamble (NYSE: PG), and International Business Machines (NYSE: IBM) have very little in common. That's the point. Diversification is important when you build a dividend portfolio. But so is owning good companies. Here's why I have no plans to sell these stocks for the next 20, or more, years.
Enbridge's business is changing
Enbridge is one of North America's largest midstream companies. It owns the energy infrastructure that helps to move oil and natural gas around the world. While it is an energy company, it allows me to avoid commodity risk because it charges fees for the use of its assets. The dividend yield is 5.4%, and the dividend has been increased annually for 31 consecutive years, in Canadian dollars.
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That's the big picture, but there's one more crucial fact. Enbridge's goal isn't to be the best midstream company. It is to provide the world with the energy it needs. This is why the company's midstream business is complemented by natural gas utility assets and a small portfolio of clean energy assets. Essentially, it is shifting its portfolio to keep pace with the changes taking shape in the world. That makes me comfortable that I can own it for decades to come.
Procter & Gamble's innovation keeps it sharp
Procter & Gamble is a Dividend King, with over five decades of annual dividend increases behind it. That's proof that the company has staying power in the highly competitive consumer staples sector. I'm fond of consumer staples stocks because they make products people buy, regardless of what is happening in the stock market or the economy. Neither you nor I are going to stop buying toilet paper or toothpaste because there's a recession.
P&G is particularly interesting in the consumer staples sector because it is positioned at the high end of the markets it serves. Not only does it have strong distribution and marketing skills, but it also leans heavily on innovation to lead the industry, driving growth with new and improved products. Essentially, P&G isn't a follower; it is a leader, which makes it extra important to its retailer customers. Retailers know that working with P&G means they have brands on their shelves that will draw customers into their stores. The dividend yield is nearly 3% right now, which is actually fairly attractive for P&G historically.