Enbridge (ENB.TO)

(A Top Pick March 1/18 - Up 5%.) He really likes it. Still one of his top picks. They have been pounding the table about this name. Double down on their position around mid-November.

Just reported strong earnings. All the negative headlines are fully on the stock. They are putting 50-year assets in the ground. Yield 6.2%. (Analysts’ price target is $52.12)

The dividend is safe. The overhang is the Line 3 expansion awaiting final approval from Minnesota, expected mid-2018. The company is confident, and has gotten approvals elsehwere. If this happens, it will be a definite
catalyst. You can buy a half-position now and see if the decision is positive.

He has been negative on the pipelines for a number of years because they took on a lot of debt and increase the dividend only by increasing the payout ratio. He is not ready to step into it here. Rising interest rates will continue to put pressure on the sector. They need to use cash flow to reduce debt to be more sustainable.

What's the relationship between Enbridge and its Income Fund? It's complex. Enbridge owns 90% of the Fund which traditionally trades at a higher multiple. The board will clean up the structure. The equity issues at the fund level will ultimately roll up into Enbridge. It's basically two different ways for them to issue capital for two different purposes.

(A Top Pick June 16/17 - Down 22.7%) Chose it for better growth than its peers and a better valuation on a free cash yield. 2017 was messy with production outages and balance sheet concerns and lately with opposition to their line 3. Kind of a perfect storm here. Still believe they are growing earnings by 12% a year. The balance sheet is high, but they have non-core assets that they can sell.

Last year's acquisition because it stretched their balance sheet. They're nowhere close to funding their dividend which they should cut. They lack organic growth and have regulatory concerns.

He is watching this one because it has tested a late 2015 low. He thinks this might dip to $36 on a panic. He wonders if it is slowly getting some traction. He would like to buy at $36 unless it goes below that.

He thinks it will turn around. The dividend of 7% is safe. This looks good in this low interest rate world. There has been a litany of band news but long term holders don't need to sell it. It is an easy stock to pick on. (Analysts’ target: $50.78).

They own the name and he would buy it here. Dividend yield is high. The value of their assets is very good. They are facing some issues with taxes in the US. The stock is under a lot of pressure for this and other issues. Looks very cheap.

This stock is going to $32. His model price is $36.66. People previously bought it for yield and now the stock is over-valued. As interest rates increase, it has to fall in value. Anything to do with pipelines is radioactive.

He follows this closely. It started to break down a while back. The energy market has hit a pipeline roadblock. ENB is overleveraged: $65 billion of debt is overweighing their market cap. He's waiting until they clean up their balance sheet. It's now trading at 52-week lows. Maybe hold this, but honestly he would have sold it by now.

If you buy it for a lift and the market rebounds, it might rebound a bit. Longer term, they have a whack of debt. It is a well managed company and he is sure they are all over it and know how to roll the debt, but the market just looks at heavy debt and asks if it really cares. 'When in doubt, stay out.'

Short-term the yield plays are oversold--interest rates aren't going up THAT fast. Enbridge has fixed its debt. Oil prices and the econmy are rising. Prefers Transcanada, but buy only one pipeline. Dividend is attractive, but don't expect a
lot of growth. Watch their debt levels.

Short-term, the yield plays are oversold--interest rates aren't going up THAT fast. Oil prices and the econmy are rising. Prefers Transcanada, but buy only one pipeline. Dividend is attractive, but don't expect a lot of growth here. Watch their debt levels.