Randy LeClairEnbridgeENB.TOCOMMENTSep 30, 2013

Doesn't own, but no quarrels buying here. A bond proxy, and bonds are selling off right now -- that's when you want to buy. 

He prefers TRP (nat gas and nuclear), while ENB has more of an oil pipeline weighting.

Core holding for income growth. He's been nibbling away at the $60 level. Stable market with slight growth. Diversified into infrastructure and gas distribution/utility. Lots of debt, so lower rates would benefit it. $40B backlog to help grow dividend 3-5% a year.

Delivers something that the economy probably can't live without. A lot of growth projects ahead, lots of liquidity. Yield is close to 6% while you wait. Not sure it has a lot of room to increase dividend in the short term, as they have plans to deploy lots of capital on projects.

Adding a bit here is not a bad idea, but make sure you're comfortable with your overall position and exposure. Interest-rate sensitive. If rates continue to go up, investors start comparing what they can get on less risky fixed income.

Liquid pipelines business, with some gas transmission in midstream (that's where the upside is). Provides 20% of US gas consumption, and 25% of feed gas for LNG exports. Those 2 industries seeing tremendous growth. Rising global demand for LNG, and NA will supply that with ENB perfectly positioned. Likes it here, he'd buy.

Overhang: Line 5 mishap with negligible environmental impact, but Michigan's trying to shut it down. Odds of that are pretty low. ENB will have to spend $$ on this and pay fines.

Trump would be unwise to ban Canadian oil. It pays a 6% yield and holds great assets around the world, including the Permian Basin.

Probably this one. Spending likely to be stronger in terms of infrastructure spend on pipelines. Valuation's more attractive than it's been for a while. He worries a bit about Line 5 in Michigan, with permits and pushback (will ultimately get done).

He bought some on the financing deal. With all the infrastructure spending, there have to be more pipeline expenditures going forward. Somewhat more defensive.

It is a quality name but he would take TC Energy with a $20 billion backlog, or Pembina, over Enbridge for the long term. Enbridge has been weak so you could buy it as a tactical move. It is a little out of favour.

He owns many pipelines which have tons of value. It's a defensive sector. Canadian pipelines and nat gas are overlooked. Is a good trade.

It is another defensive stock with over a 5% yield and has growth at these levels. Blackstone is knocking at the door and could buy some assets from them in the US. He likes the new CEO appointment.
On defensive stocks in general he looks for companies with good cash flow to manage with which they can make counter-cyclical acquisitions, raise dividends and survive market downturns.       Buy 11  Hold 9  Sell 2

Is good for income. He just bought it at $70 due to rising interest rates. Yields 5.3%. Any sell-off is attractive.

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.