Enbridge (ENB.TO)

Canada’s largest pipeline company. The crown jewels would be the main line and Lakehead pipelines, a pipeline that carries about two thirds of all the oil produced in this country. They also own downstream assets that distributes natural gas. Just completed a $42 billion transformational acquisition of Spectra Energy in the US, making them the 4^th largest company in Canada. It also broadens their asset base and positions them strategically in a growing production base. Dividend yield of 4.8%. (Analysts’ price target is $62.)

Is the dividend safe? All these utilities tend to carry more debt, while the businesses are very stable. Their balance sheet is fine and the 4.6% dividend is not a problem. This falls into a category of being a small Short for him, because valuation is not cheap.

An RESP for a 1-year-old? He would recommend this. A great kind of name for a 20-year investment, who will need the money in 18 years when they go off to school. This company pays a wonderful dividend of 4.7%.

This stock hasn’t performed this year. About a week ago it got down to about a 5% yield. They did the Spectra acquisition and increased the dividend on the back of that, so it is about a 15% dividend increase year to date. Dividend guidance going forward to 2024 is 10% to 12%. Dividend yield of 4.7%. (Analysts’ price target is $62.)

One of the major players in the North American energy field, and will become more so with the closing of the Spectra deal. Incredibly cheap. The company feels their dividends can be grown at 10% per year.

The pipelines are essentially utilities. He is glad the Northern pipeline is dead and buried as he thinks it would have been a major problem for them. This is in a Buy zone right now and has a good yield. He can see more construction coming on for the pipelines in Canada. Dividend yield of 4.7%.

Sell TransCanada (TRP-T) and move into Enbridge (ENB-T)? He would keep TransCanada as well as buying into this one. You can’t really go wrong with both. This has $30 billion of secured projects, so should be able to sustain mid-single digit dividend growth to high-single digit dividend growth during the next few years. Their capital requirements are relatively minimal. The stock price has declined along with the price of oil. This pipeline transports about 30% of the oil in North America and account for about two thirds of the transportation from oil origination in Canada to the US.

This has gone nowhere for a couple of years. Down to $50, where it has not been for some time. They openly talked about 10% dividend growth over the next several years. This is the safest way to play the energy stocks. If you are going to play energy at all, just enter through these big pipeline stocks that have long term assets. Dividend yield of 4.7%. (Analysts’ price target is $62.)

Reduced their 2017 guidance as a result of the Spectra integration. More recently, it fell on an announcement of some line-3 delays. Doesn’t think this is going to affect 2018. Trading at a cheaper multiple than it has for a while. Has 11% EPS growth over the next couple of years. Also, when they announced the delay, the market saw that and took the stock down, but didn’t applaud the fact that they had announced $2 billion in new projects over the next couple of years. A solid dividend payer with dividend growth and a 50% payout ratio. 4.8% dividend yield.

20% of natural gas goes thought this company. They have good visibility to cash flow projects. They have 1-20% growth through 2024. It is a good time to build a position and get into the name. It has an attractive yield. It got to a 52 week low today and bounced off that. (Analysts’ target: $62.00).

He wouldn’t purchase this today. Between this and TransCanada Pipe (TRP-T) it represents a huge component of the energy index. You have very large portfolio managers which are hiding in these 2 securities. The company has grown very rapidly. It has a very, very complicated capital structure now, with multiple special purpose vehicles for funding different projects. The dividend has grown at a very, very rapid pace and the debt levels have grown at a very, very rapid pace. The company is beginning to disappoint investors for the first time in a long, long time. Be careful.

He holds ENF-T. It is a dividend play. It broke somewhat of a trend line and support level. It does not have a lot of upside. 4.7% dividend.

Enbridge (ENB-T) or Enbridge Income Fund (ENF-T)? He would prefer this, the parent, over the income fund for a couple of reasons. One would be liquidity and the other would be growth. There is very little growth in an income vehicle, other than the vending down of additional assets as they are developed. In a market that is starting to grow a little faster, you don’t want to be in something that is so defensive as the income fund. He prefers growth and liquidity in this market. You still get a yield.

He likes this company and was actually considering this as a Top Pick for tonight. There could be a number of reasons, unrelated to the name, that are potentially holding back the name. People might be raising money out of this stock to fund other areas. He would definitely buy this on this pullback.

He would categorize this as a long-term hold. It is not going to be an exciting stock, but it has a nice dividend yield. Thinks it this will do fine over time, but not a real growth stock.