
TSE:ENB
This summary was created by AI, based on 38 opinions in the last 12 months.
Enbridge (ENB) is viewed as a solid and well-managed company with a strong dividend yield averaging about 5.5%. Experts highlight its financial discipline and long-term growth potential, primarily due to its extensive pipeline network and infrastructure projects in North America. However, the stock faces challenges, including high capital intensity, a fair amount of debt, and competition for investor interest from faster-growing companies. While many analysts point to a steady income story, they express caution about overall valuation and potential for significant growth. The consensus leans towards a steady investment for income rather than growth, emphasizing the need for caution at higher price points given its recent uptick in value.
Dividends safe? Regulated businesses stand a better chance to keep dividends whole. BCE and ENB are both regulated entities. Canadian banks have had a history of not cutting dividends, but you never know. It will depend on how long COVID lasts -- if we are still locked down next year, he would be a seller.
It is a great buy at this price. Just because the price of crude oil has come down, we will all still need to heat our houses next year and the fuel will get to us through their pipelines. Tremendous yield. It has debt, obviously, but he would not hesitate to buy it. In 2008/9 TRP-T was one of his biggest holdings and it took 15 months for the price to recover.
Energy stocks? Right now stick to the large, liquid energy stocks. There is growing concern of counter-party credit exposure within the mid-stream and pipeline space. He recommends ENB-T and TRP-T for pipelines and SU-T and CNQ-T for producers, if you want to own any energy stocks. SU-T yield is 7.2%, while CNQ-T is 8.4%. CNQ-T is probably still showing positive cash flow, even at these oil price levels. You may still lose money, but it will be much less than a smaller player.
Payout ratio is 70% and stable. Dividend is 7.6%. Way cheaper than TRP. Fixed the balance sheet. Pretty attractive here. Start building some positions. Decent growth rate if Lines 3 and 5 come on.