Enbridge (ENB.TO)

(A Top Pick Sept 28/17, Down 14%) Sometimes when a stock turns, you have to get out early. But sometimes you have to have patience. He hasn’t sold this name. Yield is 6.4%.

He has not been in this one for some time. The recent acquisitions are confusing.

Canada has a tough go as is not being viewed attractive on the energy side. For decades not much has been talked in terms of pipelines. Has nothing to do with the company per se. There are no buyers of Canadian Energy sector.

The company has had an interesting year falling from $50 early in the year to lows near $37. The issues now relate to the conversion of the Income Fund MLP and how they are issuing shares to buy them back. Line 3 is now de-risked, so at this price the yield is good and has potential to grow again. Yield 7%.

Has been in a general downtrend since late-2016. It tried to consolidate, and has had a head-and-shoulder formation this year. It could be breaking down again and doesn't look good.

Asked to compare Enbridge and TransCanada, he said he currently owns only Enbridge. Both are utility companies. Both pay high yields. Their stock prices are very interest-rate sensitive because interest rates drive the relative value of their dividends and because they borrow enormous amounts of money and interest rates determine the cost of carrying these loans. Enbridge focused on growth for a while, making its stock more attractive, but it took on too much debt and has had to focus on dealing with that. He is holding stock in Enbridge for clients who need steady income and he does buy it when the stock price falls too much, but this is, in general, the wrong time to buy utilities. Yield 6%.

ENB taking over ENF: Sell one, buy one or both buy? The reflationary sectors will do well in the next leg of this cycle, but the pipelines will not. Instead look at U.S. financials. Hold onto ENB, maybe make a move on the fund, ENF. Buy stocks/sectors that will benefit from rising rates.

A holder of the Income Fund has to consider the tax factor if you sell ahead of the share exchange. He likes holding the Enbridge stock with a high yield. Yield 6%.

It is a neutral. It has picked up some momentum recently. There will be some share issuance as they bring in the income fund. This will be a positive after the noise has passed.

Asked whether she owns any pipelines, she said she holds Enbridge and explained that it has sold off some non-core assets, improving its balance sheet. It is restructuring to simplify its structure. It has gained approval (Line 3) for expansion. And it provides an attractive yield, just over 6%. Yield 6%.

In the short term, it will be difficult to see grow. He would prefer to hold Pembina, with a little smaller profile. Investors will be attracted to this space for the income.

He thinks it goes to $34.84. Once they fold in the income fund the balance sheet will get a lot bigger, which is negative for the stock. With a 6% yield, it is all their income. There is better value elsewhere.

He owned it for a long time. He likes the balance sheet cleanup. They are amalgamating their underlying subsidiaries. He is in favor of not sticking to such a rigid dividend growth model.

Owns this because of the dividend in his income platform. It was oversold and is now beginning to consolidate. So likely will not go down below its lower level, but does not expect much upside in this stock either. Can hold for the dividend. Yield 5.8%

Trying to figure out how to fund the new acquisition. Cautious until we get more clarity on that. Prefers TransCanada. Fundamentals are not as strong as they used to be. If bullish on oil, it’s a good entry point. (Analysts’ price target is $54.88.)