Enbridge (ENB.TO)

It was a great performer and then earlier this year it was a poor performer. He does not average up or down.

Has owned some of this for a long time, and the only reason he hasn’t sold it is that he doesn’t want to pay the tax. The company has been treading water and is down about 7% year to date. It has been pursuing a growth by acquisition strategy, and doing it by raising its dividend to attract investors, and selling stock to pay for the dividend. They have been selling stock endlessly for 10 years now. They’ve exhausted the investment community. Very, very complex balance sheet.

(Market Call Minute.)

This has been the stalwart for dividend owners, and he wouldn’t have any trouble owning it. Thinks the world is going to become fully electric, so you want to own companies that have exposure to electric utilities. You should have one or 2 of these types of names in your portfolio, especially if you are looking for income.

PPL-T vs. ENB-T. In the energy space these have been stronger performers overproducers. With interest rates moving higher it will be a mixed blessing for pipelines. Their dividend does not look as attractive, but as interest rates go up so are their allowed rate of return through the regulator. Look for which one has the most consistent track record of dividend increases and the best record of dividend coverage. If it is the same stock for each factor, go with it and if not go with the latter factor.

Basically a long-term hold. PE multiple is always high. It is not to be compared with the oil/gas producers, high risk and cyclical. You simply hold this for the long-term. Dividend yield of 4.8%.

This is a fine company. Feels the dividend is safe. They acquired Spectra, a natural gas transition company in the US. Based on the projects they have and the backlog the sector has, they can increase their dividend 10%-12% through 2024. In a rising rate environment, it is very important to find companies that have an attractive yield. Dividend yield of 4.66%.

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.)