I’m going to start a new series on my site entitled Then and Now where I revisit some older blogposts and either rip them to shreds (because my thinking has changed since then) or I’ll confirm my position on some personal finance subjects. I have no idea how often I’ll run these types of posts but I figure it would be something fun to try. It might be interesting to learn from my past so I can apply those lessons learned for the future.
My interest is in the future because I’m going to spend the rest of my life there.
– Charles Kettering, American Engineer, Inventor of the electric starter, Former head of research at GM.
Today’s post will look back at my purchase of Enbridge many years ago. Enbridge (ENB) was my first blue-chip Canadian dividend paying stock. I purchased ENB at a time I was starting to unload many of my high-priced mutual funds within my Registered Retirement Savings Plan (RRSP). These were the days before My Own Advisor was launched and before the Tax Free Savings Account (TFSA) existed.
Then
- I started buying Enbridge, with a $500 purchase using their Transfer Agent (then CIBC Mellon Trust), in December 2008.
- I continued buying Enbridge using the Transfer Agent, taking advantage of the full Dividend Reinvestment Plan (DRIP) throughout 2009 and into early 2010.
- I stopped my full DRIP with the Transfer Agent before the end of 2010.
- I transferred all Enbridge shares to my discount brokerage.
- I received a 2-for-1 stock split in May 2011.
Now
- Enbridge makes up just over 3% of my portfolio.
- My return on this stock is well over 100%.
- I have no intention of selling this stock.
Investing is not this easy. I feel in hindsight my decision to buy (and hold) Enbridge was a bit of a no-brainer but there are no guarantees. Not every investing decision comes up roses and while Enbridge has been a bright spot in my portfolio to date, the future is always very cloudy.
What do you make of this series? What to read more “Then and Now” posts in the future?
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
I started with Enbridge a little before you Mark. In 1992 I bought six hundred shares and in 1994 I liked it so much that I bought another six hundred at a price of $27.875 in 1999 they said they would split the shares so I bought one hundred which gave me 1300 shares. After the split I had 2600 shares. In 2005 they said they would spit the shares again. Also that year my dad past away. I said to my brother that you have all kinds of money and so do I so why don’t we just split the shares which he thought was a good idea. Dad had 2200 hundred shares so when they split the shares I had now 5200. I new I was going to get another 2200 so I bought six hundred more. Now I have 5800 and when the estate came due I received the 2200 bringing me to 8000 shares. I thought 10000 would be a nice round number so I bought 2000 more. As you mention in 2011 they split the shares again so now I have 20000. In 2016 they merged with Spectra Energy and decided to take some funds and partnerships private. I received 551 for my 750 of Enbridge Income Fund. At the start of the pandemic I bought 449 to give me now 21000 shares. It’s a great company but takes up 24%/25% of my portfolio so it makes it hard to buy more. i FIND DRIPing confusing as if and when you sell a stock you have to keep track of when these dribs and drabs where purchased
Ronald, hard to know what to say 🙂
21,000 shares of ENB??
Wow.
So, if I do the math, you earn about $18k in ENB dividends, every quarter??
I’m just over 1,000 shares here so I have some room to catch up to you!! That said, ENB makes up about 3% of my portfolio. I get paid enough ENB shares to cover my entire condo utility bills now every year. Ha. I like being an owner of what I and millions of Canadians consume.
Yes, having the DRIPs turned on is a mess to calculate but not an issue as you know inside TFSA, RRSP, etc.
Awesome. I love reading this stuff and motivation for me to keep going as I pursue some semi-retirement dreams.
How does one initiate a transfer from a drip to one’s own brokerage?
Check out post #5 Sabrina and let me know if you have further questions.
https://www.myownadvisor.ca/drips/
Cheers.
ohoh mark. how will the supreme court decision affect enb. i have quite a bit of cash in enf. hopefully they have some cracker jack negotiators!
Things will work out Gary…just another bump in the long road of owning these types of stocks!
Reads much like my plans with TD when I bought it at $28 about 10 years ago, don’t plan on selling it although I am 100% DRiP on it as well (inside RRSPs right now). Starting to think about maybe doing this outside of a registered account, but we shall see.
I keep U.S. stocks and ETFs, for the most part, in my RRSP so all the CDN content is in other accounts. TD is an excellent stock, great call.
In regards to Enbridge, how do you think Enbridge(ENB) and Enbridge Income Fund Holdings (ENF) compare? Both equities have performed well over the past 5 years, and ENF dividend yield is currently 2.2% higher and conveniently pays out monthly.
Interested on your thoughts on them 🙂
I like ENB more largely because the dividend history is more established but ENF seems to be good as well. Hard to argue with the recent dividend history of ENF, it has been rising every year since 2004. I suppose if you are in need of/are looking for dividend income and already have ample diversification, ENF is a good play. I have considered ENF in the past and may consider it again for my wife’s TFSA next year depending upon the price.
I hope the Northern Gateway pans out for enbridge. So much resistance! But energy sector looks rosy in the future. Thanks for your stock flashback!
For sure, re: energy sector has growth in the future. Not a good news story overall for the environment…I don’t see energy demands curbing for a few more generations.
Looking forward to the series as well Mark. Hindsight is 20/20, and what’s important is that we learn from our mistakes from the past and not get too overconfident on past success.
Thanks for saying that Brian. Just wait until I post my article about TransAlta 🙂
I like the new series, MOA. Do you own the ENB shares in a tax-sheltered account? I am DRIPping BNS which I started in the end of 2013. Once I get a good amount of money into it, I am thinking of transferring it to a TFSA account. There is some writeup on dripprimer.ca but would appreciate if you have any more resources and points on the transfer process.
regards
R2R
No, ENB is in a taxable account and the gains will need to be offset at some point.
Roadmap2Retire, did you check out this post?
https://www.myownadvisor.ca/closing-your-drips-and-spps-transferring-your-shares-to-your-brokerage/
Let me know what you think I’m missing in that post and I’ll update it or email you some guidance.
Mark
ENB was also one of my first, dividend focused purchases and it certainly has been a winner as you point out. It’s steady performance and dividend growth make it a strong, buy and hold purchase, especially when you got it when we did.
What would make your series more interesting, would be to take your analysis one step further. You basically gave yourself a ‘thumbs-up’ on the purchase, but what would be interesting would be how you look at it today. Is it worthy of further investments?, do you continue to synthetically DRIP the stock. Off the top of my head, ENB dividend rate was nearly 4% when I first purchased it, today, with capital appreciation it’s less than 3%. What has been the dividend growth rate since purchase? What are prospects looking forward?
This view would add meat to the ‘Then and Now’ concept.
You made some good points gmf.
I look at ENB as a buy but not really at these prices, although it will likely continue to go up. I’ve recently turned off the DRIP for ENB since the price is high and will take the cash instead. I hope to build up some money for a stock market correction.
I think ENB remains an excellent buy and hold for my portfolio. The dividend growth rate has been about 13% per year over the past 10 years.
ENB…Interesting about shutting off the dripp, think I might do that too
Got a few thousand shares. Been thinking same, but u motivated my same move.
ENB…Interesting about shutting off the dripp, think I might do that too
Got a few thousand shares. Been thinking same, but u motivated my same
Hey I just, noticed the year dates of these comments…… guess I was asleep at the wheel
Ha. Older post. I will update these yet again in a few years as things change or evolve or I just buy much more.
Been an owner of ENB for over 12 years now. DRIPping lots of shares inside registered accounts.