Motley Fool contributor Matt DiLallo favors Enbridge’s nearly 6% yield over Delek Logistics’ yield above 8%, arguing Enbridge is safer because more than 98% of its earnings come from regulated rate structures or take-or-pay contracts and it has a stronger balance sheet.
Enbridge’s operations span liquids pipelines, gas transmission and distribution, and renewable energy. It has more than 200 asset streams, over 95% investment-grade counterparties and a 20-year record of meeting financial guidance. The company expects cash flow per share to grow about 5% annually after next year and has raised its dividend for 31 consecutive years in Canadian dollars.
Delek Logistics has raised its distribution for 54 consecutive quarters, but DiLallo cites its junk-rated credit and a 75% payout ratio in the first half of this year. About 30% of its earnings come from parent refiner Delek U.S. Holdings, down from 59% in 2023, leaving it exposed to one major customer, according to the article.
