Veronika HirschEnbridgeENB.TOWATCHAug 08, 2012

Excellent, very-well-managed company. Great financial discipline. Nice dividend of 5.5%, tax-advantaged over bonds. Expected EBITDA growth is ~5%. Payout ratio ~65%, not much room for dividend increases (~2-3% a year). Highly capital-intensive, fair amount of debt. Cost of debt going up makes it hard for valuation to go higher.

More attractive are companies with dividends that may be lower, but growing rapidly.

We talked about this last week, saying that a bit more of a pullback was probably in the cards.

Maintaining the dividend is not a challenge, and it will continue to grow. Under pressure because of the assumption that peace will come to the Strait of Hormuz. But the space ran up in the first place due to the conflict. Just look at the chart. Big capex program, growth in various businesses. 

Blue-chip company, ballast for your portfolio. Buy, put it away for the dividend. His firm has owned for ~27 years, and they've been happy campers reaping the income.

Move down is probably due to the quick move in long bond yields across NA. When interest rates start to go up, and you consider the risk-free rate of owning bonds versus owning a riskier equity, dividend stocks fall. Not a lot of organic growth or high ROIC.

He expects the chart to decline like it did in 2022-2024 where there's a re-valuation and it will go sideways. So, don't buy at the top at $80, but looks good now at $70 for the dividend. It's not a growth, but income story. This could decline further, so buy only a tranche now.

Pays a 4.5% dividend that will grow. They have the largest crude oil pipeline network in North America. They own nat gas operations in the U.S. They have a backlog that can grow their cash flow by 5%. Will benefit from Ottawa's infrastructure growth in western Canada.

Yield is a bit lower than some of the others. Results were largely in line, market reaction may just be due to whipsawing from Iran war. As well, not immediately proceeding with an expansion. Still a very good name, though he owns PPL for its size and growth.

Any of Canada's 4 major pipelines are good investments for the long term.

Started buying this in 2019 and added during dips. Is steady and pays a decent dividend, but is not that cheap nor expensive. Not a bargain, but a good place to park cash at a 4.5% dividend with modest growth.

He doesn't own any of the pure-play oil producers right now (though he does own TOU). The reason is the volatility we're seeing. 

His team plays energy these days by owning ENB, and some of the smaller midstream companies like PPL and GEI. He likes their stability. 

Pipelines are not quite as good as utilities for safety, because they're perceived as being commodity-sensitive (even though they're really not). This name will give you a good dividend and safety. You'll get your dividend, and the safety means you can sleep at night (and that's worth something). You can get diversification via funds and ETFs.

Pipeline companies benefit from oil volumes and reflect long-term oil prices. ENB will benefit from higher prices in its contracts and higher volumes over time. ENB is a solid name, pays a good yield and trades at an okay PE.

Pays a 5% dividend. They make money as long as fossil fuels are flowing.

Likes it, great business. Performing really well. Incredibly strong management. Only negative is that, in general, securities with higher dividends and lower growth are not leading this market. 

Risk/reward is good. Energy sector is relatively early on in a longer-term bull phase. Some inflation protection. Yield is 5%.

Lots of energy demand out there. They continue to grow and execute. Trades at 22-26x PE, a little high, but they are consistent in earnings and cash flow. It's defensive but has spurts of growth. Energy is fine, but prefers utilities.

Has been an income stock for her for many years. Is the biggest pipeline company in the world while their renewable business is growing. Wars are pushing governments to secure energy supplies. They serve 75% of refineries in the US Gulf Coast. Canada wants to build more energy infrastructure. Both are tailwinds. But we need to see higher production growth from energy products and Indigenous support for new pipelines. Pays a 5.3% dividend that keeps growing.