Last fall, Enbridge (NYSE: ENB) made a bold strike. The Canadian pipeline and utility giant agreed to buy three natural gas utilities from Dominion in a $14 billion deal. The transaction would create the largest natural gas utility franchise in North America.

At the time, Enbridge’s CEO Greg Ebel stated, “Adding natural gas utilities of this scale and quality, at a historically attractive multiple, is a once-in-a-generation opportunity.” While it took a little more than a year, the company has finally closed this generational opportunity to expand its gas utility business. The deal significantly enhances the company’s ability to sustain and grow its 6.5%-yielding dividend.

Closing the final phase

Enbridge recently announced that it has closed its acquisition of Public Service Company of North Carolina (PSNC) from Dominion. The deal adds over 600,000 service customers in the state, which it serves with over 13,000 miles of gas distribution and transmission pipelines and other related gas infrastructure assets.

The utility should supply Enbridge with stable, low-risk cash flow backed by government-regulated rate structures and steady gas demand. That cash flow should grow in the coming years as Enbridge invests in expanding PSNC’s infrastructure to support rising gas demand in its service region.

Closing the PSNC acquisition was the final phase of this transformational transaction. Enbridge previously closed the purchase of The East Ohio Gas Company in March and completed its deal for Questar Gas Company in June.

The trio of gas utilities significantly expands Enbridge’s gas distribution platform. It will supply 22% of the company’s annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), up from 12% before the deal. It further diversified the company’s business while increasing its exposure to lower carbon energy.

The new gas utilities also increased the company’s cash flow from stable regulated assets and enhanced its growth profile. Enbridge expects to invest 5 billion Canadian dollars ($3.7 billion) over the next three years into low-risk, quick-return projects, which will increase its earnings from these utilities.

Enhancing an already strong foundation

Enbridge has built one of the lowest-risk businesses in the energy infrastructure sector. The company has a diversified platform focused on four core franchises: liquids pipelines (50% of its EBITDA), gas transmission and midstream (25%), gas distribution and storage (22%), and renewable power (3%).

About 98% of the EBITDA generated from those businesses comes from cost-of-service or contracted assets, which are very predictable and stable. As evidence, Enbridge has achieved its annual financial guidance for 18 straight years, despite two major recessions and two additional periods of oil market turbulence.

The company targets to pay 60% to 70% of its very stable cash flow to investors in dividends. It retains the rest to invest in its large backlog of commercially secured capital projects. The utility acquisitions pushed its backlog to CA$24 billion ($17.8 billion) of projects it should complete through 2028. Those projects give it lots of visibility into its future earnings growth.

The company expects those projects will help grow its EBITDA by about 5% annually. Meanwhile, it has additional investment capacity, thanks to its strong balance sheet, which it can use to sanction additional expansion projects and make accretive acquisitions, further enhancing its growth rate.

With a strong financial profile and visible earnings growth, Enbridge should have plenty of fuel to continue increasing its dividend. It could grow its dividend by as much as 5% per year over the medium term, further extending a streak that is currently at 29 straight years.

An elite dividend stock

Enbridge has closed its once-in-a-generation opportunity to add three high-quality gas utilities to its portfolio. They enhance the stability of its earnings base, increase its diversification, and bolster its growth profile.

Because of that, Enbridge is in an even stronger position to continue growing its dividend. That makes it an excellent dividend stock to buy for the long term.

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

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Matt DiLallo has positions in Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.

This 6.5%-Yielding Dividend Stock Just Closed the Final Phase of a Once-in-a-Generation Opportunity was originally published by The Motley Fool

Super Micro Computer, Inc. (NASDAQ:SMCI) has entered a long-term strategic partnership with Fujitsu Limited to develop and market a platform that will feature Fujitsu’s future Arm-based “FUJITSU-MONAKA” processor.

The platform is designed for high performance and energy efficiency and is scheduled for release in 2027.

The partnership will also focus on creating liquid-cooled systems for high-performance computing (HPC), generative AI, and next-generation green data centers.

Fujitsu and Supermicro will combine their expertise to create a leading server portfolio.

Supermicro’s flexible Building Block design enables quick customization of servers for AI, HPC, and general computing, supporting both cloud and edge deployments.

The collaboration will involve Fsas Technologies Inc., a Fujitsu subsidiary, to deliver global generative AI solutions using Supermicro’s GPU servers and support services for data centers and enterprises.

“Supermicro is excited to collaborate with Fujitsu to deliver state-of-the-art servers and solutions that are high performance, power efficient, and cost-optimized,” said

Charles Liang, president and CEO of Supermicro.

“These systems will be optimized to support a broad range of workloads in AI, HPC, cloud and edge environments. The two companies will focus on green IT designs with energy-saving architectures, such as liquid cooling rack scale PnP, to minimize technology’s environmental impact.”

Investors can gain exposure to Super Micro through iShares Future AI & Tech ETF (NYSE:ARTY) and Defiance Daily Target 2X Long SMCI ETF (NASDAQ:SMCX).

Price Action: SMCI shares are down 0.26% at $41.89 premarket at the last check Thursday.

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US stocks drifted lower on Thursday as the focus tentatively turned back to the economy and the monthly jobs report. Meanwhile, worries over the Middle East conflict rumbled in the background.

The S&P 500 (^GSPC) dropped 0.2%, while the Dow Jones Industrial Average (^DJI) fell about 0.3%. The tech-heavy Nasdaq Composite (^IXIC) moved roughly 0.4% lower. All three gauges closed Wednesday slightly above the flatline.

Some calm has returned to a market rattled by escalating Mideast tensions that have driven sharp gains in oil prices. Israel has yet to launch its promised retaliation to Iran’s missile strike on Tuesday, amid efforts by Western and regional leaders to stabilize the situation.

Investors are now bracing for the highly anticipated September jobs report on Friday, after a surprise uptick in private payrolls came alongside signs the labor market is loosening up.

Investors received more signs of general cooling in the labor market on Thursday. Weekly jobless claims ticked up slightly from the prior week. Meanwhile, planned layoffs in the US dipped from a five-month high, according to a report from Challenger, Gray and Christmas. But the firm’s vice president said the data showed the labor market is at an “inflection point.”

Any new signs of deterioration in the labor market could prompt the Federal Reserve to follow up its 0.5% interest-rate cut last month with another jumbo move, despite policymakers’ expectation of a 0.25% cut in November.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards

Meanwhile, the Israel-Iran crisis helped drive oil prices higher for a third day, another potential drag on economic activity. Brent crude (BZ=F) and West Texas Intermediate (CL=F) futures were both up over 2% on Thursday.

On the corporate front, Levi Strauss (LEVI) shares tumbled over 10% in premarket after the jeans giant posted a disappointing revenue forecast and said it is considering a sale of its Dockers brand. Tesla’s (TSLA) stock continued to slide in the wake of downbeat delivery figures, as Reuters reported the EV maker has halted US online orders for its cheapest Model 3.

On CNBC’s “Mad Money Lightning Round,” Jim Cramer said NANO Nuclear Energy Inc. (NASDAQ:NNE) is losing a “lot of money.”

On Oct. 1, NANO Nuclear Energy said Carlos O. Maidana has been named as the company’s head of thermal hydraulics and space program.

Cramer recommended buying McKesson Corporation (NYSE:MKC). “I’m ready to start buying, don’t buy all at once.”

Don’t Miss Out:

On Sept. 25, Deutsche Bank analyst George Hill maintained McKesson with a Buy and lowered the price target from $623 to $579.

Diamondback Energy, Inc. (NASDAQ:FANG) is a “little too much oil for me,” Cramer said.

On Oct 1, Wells Fargo analyst Roger Read maintained Diamondback Energy with an Overweight and lowered the price target from $230 to $219.

“It’s got a huge multiple for its growth rate, and that is worrisome to me. I’m going to have to say we got to come back with something that is less expensive,” Cramer said when asked about Littelfuse (NASDAQ:LFUS).

On Aug. 29, Baird analyst Luke Junk maintained Littelfuse with an Outperform and raised the price target from $300 to $315.

Archer-Daniels-Midland Company (NYSE:ADM) is a “value trap,” Cramer said.

On Sept. 9, UBS analyst Manav Gupta maintained Archer-Daniels Midland with a Neutral and raised the price target from $60 to $64.

Price Action:

• NANO Nuclear Energy shares gained 14.8% to settle at $16.54 on Tuesday.

• McKesson shares gained 0.8% to close at $498.48 during the session.

• Diamondback shares gained 3% to close at $177.52 during Tuesday’s session.

• Littelfuse shares fell 1.7% to settle at $260.64 on Tuesday.

• Archer-Daniels-Midland shares fell 0.4% to close at $59.52 on Tuesday.

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