Enbridge (ENB.TO)

It has been in the good news box in the last couple of weeks. They have shown the stability of the model. We need pipelines. It has reasonable debt. It is a question of watching execution taking place.

(A Top Pick June 27/17 Down 7%). There have been funding concerns in the market surrounding their future capital requirements. They have announced a plan to restructure and have sold some assets along with receiving approval on the Line 3 project. Yield 6%

They have a lot of debt, because of future projects. On June 29, Minnesota will decide on BTE's line 3. So, there's risk between now and then, if the approval isn't granted.

ENF-T is a subsidiary and owns a lot of their Canadian pipelines. It is a stable interest sensitive. This stock has lagged as interest rates rose. He likes ENB-T, the parent because they are rolling up all these subsidiaries. The sale of ENF-T to ENB-T should close by the end of the year. Now ENF-T tracks ENB-T.

What they have in the ground is getting harder and harder to replace. It is more valuable than ever. The thinks the stock can get back into the low $50's. (Analysts’ target: $51.70).

Pipelines have been front and center. What the Feds are doing is stupid. They should have waited. There is a chance that the government of BC will change in the next few years and the majority of the population wants the pipeline. We know we need more pipelines to get more oil to market. West Texas pipelines will be exhausted in 4 months, they say. The question is how many pipelines are needed. The energy we use is changing dramatically as well get into alternative energies. Will pipelines become white elephants in the future?

He gets asked about this stock the most. Fundamentals are solid, but it's highly levered and suffers from a complicated company structure. It's on a long-term downturn. He's on the sidelines, waiting to see how interest rates effect this.

He has PPL-T which has done phenomenal. In the past they bit off too much more than they could chew. They are in retrenchment mode. It will survive. Pipelines are far more complicated now in getting permits. Hang on for many years and you will do fine. Don’t expect a quick recovery.

Dividend investment stocks have been shunned the last year. Stock correction has factored in the fed interest move this year. Some concerns that they may be over leveraged. There has been some shorting of this stock. But thinks they should be able to work through this. Pipeline businesses are very different today. Nothing is getting built because of changes in regulations. Markets are waiting for the Government to step up. Enbridge has the biggest oil pipeline. Is an attractive investment.

The dividend is attractive, but what if interest rates rise? Wait for the increase, which he believes will happen at some point, and see if the stock comes off a bit. A great company that's gone through tough times (hostility to pipelines in
Canada). It's a great long-term hold, but wait for a better entry point.

(A Top Pick June 15/17, Down 15%) Stock has pulled back for a number of reasons: the Spectra acquisition, need to do asset sales to pay for it, pulled back dividend to 10%. The Line 3 expansion approval in June is the biggest overhang. Yield is over 6%. Market is not going to give Enbridge much credit for Line 3 going through. Trading at a very attractive multiple. Income-sensitive stocks like this one have been hit. If you don’t hold it, buy half a position.

The pipelines have been pressured this year due to troubles in building pipelines. They're also interest-rate sensitive. ENB offers some decent value now with solid growth prospects. The dividend is sustainable. Look at this and start
picking away at it. There's still uncertainty around the Kinder Morgan pipeline--who will eventually buy it?

It's the biggest conundrum on Bay St. It was once a darling, but now? The collapse in oil and anti-oil sentiment has pushed this stock down. Pays a 6.5% dvidend and should grow. But its debt is nearly as large as its market cap. Can ENB survive in a world that's so anti-pipeline? Foreign investors are walking away from Canadian energy.

Owns it. Has been a great stock for them for many years, had some issues more recently. Had some issues because they couldn’t get Northern Gateway to pass. They own pipelines, gas utilities, wind farms, etc. which gives a guaranteed rate of returns, but you need to grow, so they wanted to do Northern Gateway but that was taken away from them. Now in the process of replacing Old line 3 going through the U.S., hopefully that will go through. But most recently bought Spectra Energy and probably took on too much debt to do that. Thinks its over sold now and will see some recovery. Not going to make a lot of money with pipelines and utilities while the interest rates go up.

(Past Top Pick on May 15, 2017, Down 22%) He still holds it. All the bad news is in by now, so it can't get worse. Short-term, ENB's line 3 expansion's plan B has been approved but on June 26, ENB may get approval for it's preferred plan A route which will result in either $4 upside or $2 downside. Wait for an entry point. The current dividend yield of 6.6% is their highest ever.