Enbridge (ENB.TO)

One of his favourites. He sees a very positive growth rate in dividends over the next 6-7 years, and probably going out as they develop additional infrastructure. A classic example of a Canadian utility going into the US and making a major acquisition. That will be the basis of further growth in the future. He would be comfortable buying this here.

Enbridge (ENB-T) or Enbridge Income Fund (ENF-T) for dividend income? This one is the company that is building the pipeline and the energy services, etc. Once that is completed, it is largely sold to the Enbridge Income Fund.

This has a nice dividend yield. It just made a huge acquisition of Spectra in the US. They claim to have lots of runway and that dividend growth is going to be 10% per annum. They are going to rebuild the main pipeline that runs from Alberta into Duluth. It is probably a very solid company. If they can deliver the 10% dividend increase, you’ll be fine.

Enbridge (ENB-T), Toronto Dominion (TD-T) or split the money in half? This is a tough question, as he owns both. Both stocks have their merit. TD over the long run probably has the better story because of their large US franchise. However, Enbridge acquired Spectra. He would split the money and buy them both.

This gives you a little bit of a dividend play. With their buyout of Spectra Energy last year. They probably have growth out to the next decade now. One thing you have to be concerned about over the long-term with some of these pipeline companies is the regulatory hurdles and the approval process where they’re probably more of a merger and acquisition play to get their growth. You could probably see another 10% growth.

Preferred Series V. This is a US$ one, but it gets the dividend tax credit. It has had a tremendous run, and he hasn’t sold a share.

He likes the growth outlook and they have pledged to increase their dividend every year. The Canadian economy needs pipelines to be done.

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.