Enbridge (ENB.TO)

One of those great Canadian businesses that amounts to a monopoly, or a very limited market. This is a wonderful business. They’ve had an incredible track record over the past number of years. They consistently raise their dividend. If it got a little weaker, he would be looking to add to his holdings.

He’s been a big admirer of this. The problem is, it always looks expensive on a valuation basis metric, but on the other hand they have several billions of dollars of projects going forward. He thinks they are going to continue to increase their pipeline. An outstanding dividend company.

He is constructive on energy. Holds this as well as 2 others that are similar, Keyera (KEY-T) and Inter Pipeline (IPL-T), and is more constructive on them than on Enbridge. Enbridge is doing a lot of borrowing and have a fairly high payout ratio. Keyera would be his #1 pick in the space.

The dividend is safe, the primary reason why most investors own it. In terms of valuation, it is very expensive. You are paying top dollar for this. A great business, and we are going to continue to use pipelines, and its cash flow is reoccurring and stable.

He likes the pipelines as there is always going to be a need to move petroleum products. The yield is okay, but not that exciting. But if you want a long-term, safe investment in the energy industry, this is probably not a bad place to put your money.

He really likes this. The Spectra acquisition will close, and as always, they are going to have to integrate it and get the synergies out of it. Very well-managed. So far everything is working favourably for them. Recently increased the dividend, and he expects to continue to see modest increases over the next several years. He can see this easily getting up to the $60 level. This is a growth story.

This has done about 12% annualized total return since 1952. The future still looks bright. They have the line 3 replacement project, the largest capital project in their history, which is going through some regulatory hurdles, but thinks they will get it going. The merger with Spectra is another thing for them. The pipeline sector, is moving from sort of more in the “growth at a reasonable price” area into a more utility like cash flow arena. With a solid yield and the dividend growth, you can’t go too far wrong.

Likes the pipelines and thinks the environment is improving. He was not unhappy that the Northern Gateway got cancelled. That would have been a political and legal burden for this company. The time was not right for that. 4.1% dividend yield.

ENB-T vs. JE-T. Ask yourself why you should sell ENB-N. You should not sell it because they have raised the dividend every year. ENB-T is a safe, stable company that grows the dividend and never loses money. They can continue to grow the dividend. JE-T has been a great recovery story, but he would not sell ENB-T to buy JE-T. ENB-T moved their money into the US which everyone wanted to do.

Trans Canada (TRP-T) or Enbridge (ENB-T)? The pipeline stocks have got a little bit of a boost from Mr. Trump. Energy stocks in general will probably do fine. Feels the big rally in energy prices will probably peak out around here. He doesn’t see oil prices going to $70-$75. Doesn’t think either one of these are going to particularly be barnburners, and both have reasonable dividends. Thinks the pipelines are probably the more favourable of the 2.

(A Top Pick Feb 9/16. Up 20.98%.) This happened to coincide with a rebound in commodity prices. He is generally constructive on commodity prices, especially if you get a little bit of recovery in Western Canada and production in the US.

A really good quality company. The pipelines got a lift with Trump signing into Keystone XL, and this company has done a pretty good job of working around what would have been the likely route of XL. You don’t have the commodity risk, because this is a transporter. It’s a fee for service business. An outstanding company. They are growing their dividend north of 10%, and hasn’t had a dividend cut in 50 years.

Enbridge (ENB-T) or TransCanada (TRP-T)? These are both great stocks. This one is a little more expensive at 24X with TransCanada at about 22X. This company has some issues on Line 3 with regulators in the US, as to whether or not it goes through. Meanwhile the Trans Mountain pipeline is going to Kinder Morgan, which could pressure their main line a little down the road. Both have good growth, but this one has the better growth over the next couple of years. He likes the Keystone element to TransCanada, and thinks Trump is going to put that through.

TransCanada (TRP-T) or Enbridge (ENB-T) for a 10-year hold? Both companies have done something very interesting by making big US acquisitions. He likes this one because there is some very good growth and management has been spectacular.

(A Top Pick Oct 8/15. Up 8.2%.) This is doing all the right things. They got beaten down with all the other pipeline companies, and have come back significantly over the period. He is looking for dividend increases of 10% in 2017.