Invest $7,000 in This Dividend Stock for $388 in Annual Passive Income

Do you plan on investing $7,000 in the markets with an aim to earn passive income?

If so, dividend stocks are the way to go.

With dividend stocks, you can earn considerable sums of passive income each and every year. Some of them have very high yields coming right out of the gate, for example, 5% or higher. Additionally, many of the stocks grow their dividends over time, resulting in extraordinarily high yields-on-cost for patient investors who stay the course.

In the late 1980s and early 1990s, Warren Buffett and Charlie Munger started accumulating a position in Coca-Cola stock. Today, those shares yield 54% on the price that Buffett and Munger paid for them 35 years ago. That’s not to say that you could get a 54% yield on Coca-Cola shares today; you’d have to somehow pay the 1990 share price to do that. However, you can invest in high-quality dividend stocks today and hopefully enjoy a much higher yield-on-cost at some point in the future.

In this article, I will explore a stock that can pay you $388 a year, year in and year out, if you invest just $7,000 in it, which has also been growing its dividend over time.

Enbridge

Enbridge Inc (TSX:ENB) is a Canadian midstream energy company that transports energy across North America and also operates as a natural gas utility. The company is the largest pipeline in North America, with 21,000 kilometres of pipe spanning the continent. It supplies most of the oil and gas that is shipped from Canada to the United States. It also supplies 75% of the natural gas consumed in the province of Ontario.

Good performance

Enbridge has been performing quite well as a business lately.

In the trailing 12-month period, it grew its revenue, operating earnings, and operating cash flows at the following rates:

• Revenue: 33%.
• Operating earnings: 19%.
• Operating cash flow: 0.56%.

Overall, these were fairly respectable rates of growth. On the other hand, the company’s reported earnings declined in the same period. That’s not really a major long-term negative; the company saw a short-term spike in earnings last year due to non-recurring factors; this year, earnings regressed to the mean somewhat.

In addition to growing modestly, Enbridge is also highly profitable, boasting the following profitability metrics in the trailing 12-month period:

• A 41.6% gross profit margin.
• A 9.4% net margin.
• A 2% free cash flow (FCF) margin.
• A 9.5% return on equity (ROE).
• A 4.3% return on capital (ROC).
• A 2.8% return on assets (ROA).

So, we’ve got a highly profitable, growing business here – seems potentially worth investing in.

Dividend potential

One of Enbridge’s big claims to fame is its dividend yield. The stock pays a $0.9425 quarterly dividend, which works out to $3.77 per year. At today’s stock price ($68), that provides a 5.5% dividend yield. If you invest $7,000 in ENB, you should get $388 per year back in dividends. See the math below.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYEnbridge$68103$0.9425 per quarter ($3.77 per year)$97.02 per quarter ($388 pear year)Quarterly

That’s a considerable income supplement coming from a $7,000 investment. And, Enbridge’s dividend even has the potential to rise in the years ahead. Overall, it looks like a decent dividend stock to buy and hold.

The post Invest $7,000 in This Dividend Stock for $388 in Annual Passive Income appeared first on The Motley Fool Canada.

Should you invest $1,000 in Enbridge Inc. right now?

Before you buy stock in Enbridge Inc., consider this:

The Motley Fool Stock Advisor Canada analyst team identified what they believe are the 15 best stocks for investors to buy now… and Enbridge Inc. wasn’t one of them. The 15 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,105.89!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 95%* – a market-crushing outperformance compared to 72%* for the S&P/TSX Composite Index. Don’t miss out on our top 15 list, available when you join Stock Advisor Canada.

See the 15 Stocks #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of November 17th, 2025

More reading

• 2 Dividend Stocks I’d Happily Buy and Hold for Life
• 2 Dividend Stocks I’d Buy Over Enbridge
• TFSA: A Beginner’s Guide to Creating a Passive Income Portfolio
• TFSA Income: 2 Premier Canadian Dividend Stocks to Buy Right Now With $10,000
• 2 TSX Giants to Buy for Years of Growth and Dividends

Fool contributor Andrew Button has no positions in the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.