Enbridge (ENB.TO)

All the utilities and interest sensitive type stocks like this have been acting well, because investors have been looking for yield. This company is going to be raising its dividend quite sharply for a number of years, which he likes. They have some projects coming on. Some will make it politically and economically, some won’t, but he still likes the outlook for the next 3-5 years. The biggest risk is interest rates. If they start to go up again, all the pipelines, utilities and telco stocks will be at risk, as money will flow out of them and into fixed income.

Enbridge (ENB-T) or Suncor (SU-T) for a TFSA? With registered money, you put dividend yielders in, and this company is a classic example of a dividend grower. The money is compounding there with no tax on it until you take it out. He would stick with Enbridge.

This is a utility. A big company with major pipelines that are going to be full for years and years to come. The real problems occur in areas where you want to expand. Thinks the Northern Gateway is never going to fly, which was one of their favourite projects. Dividend yield of 4%.

Likes this and thinks it makes a lot of sense. The midstream names are a bit of a conservative way to play into the energy recovery if you think that is happening. He prefers something like Pembina Pipeline (PPL-T), which has a bit of a pickup in dividend and pays closer to 5%. Likes both names.

Likes this. It has the best growth of the pipelines going forward. You need some government cooperation to get some of this new stuff built, but they have something like a 5-7 year time horizon for most of their new projects. There will be some disappointments and it will get stretched a little. They are looking for 8%-10% earnings growth for each of the next 5 years, and 8%-10% dividend growth. A little expensive on a PE basis, but in the low $50, it is a Buy. 4% dividend yield.

He likes it at these levels as it was painted with the same brush as other energy names. It was mispriced. It is up about 15% from January, but off of its highs. You have the opportunity to collect that dividend and some share price appreciations. Don’t be in a rush to sell it.

This is a name he likes. Had held this for a long time and was one of the last names he gave up in 2014. It does so well in so many different environments in the energy cycle. It has a $72 target, which is a nice big up move. Above its 50 day moving average, which is really positive. Has started to turn up against the S&P. Dividend yield of 4%.

In the energy sector and it has gotten beaten up pretty badly in the initial stages, but this is a utility. It is carrying oil and will continue to operate its pipelines, both in Canada and the US. The Northern Gateway is probably a dead issue. Thinks the dividend is okay and the company is safe.

The dividend has been growing quite a bit over the last 10 years. They finally accepted that they have to diversify outside of pipelines. The next phase for their growth will be renewable resources, which could hold their stock back. It is safe and secure and it is a regulated utility. Earnings will fluctuate all over the place so you have to look at free cash flows to determine the health of the dividend.

Not one of his favourite stocks. Has a lovely 4% yield, but has a premium multiple, so is open to some disappointment. People are definitely flocking to pipelines and utilities, because of their dependability, and are bidding them up in price. He would not be buying any more at these levels. This would be a Soft Hold.

Has always liked this. It is one of the companies he sold, but is now building back a position. A great Canadian company with really good management. At this price, it is a really good entry point. Dividend yield of 4.2%.

There was a question about smaller companies being able to pay their bills for transport in the pipelines. He sees this as an opportunity in ENB-T. It is one of his favourites. He currently prefers TRP-T at current levels. Longer term ENB-T should do well.

The $40 range was a great buying opportunity. Not cheap, trading at around 23X earnings, but have been able to show that they can grow their earnings. Have a big CapX program going on that they can easily fund without hurting their payout ratio. A very good, consistent company over a long period of time.

Pipelines. Which one for a long term hold? ENB-T is probably the one to bet on. He owns 4 pipelines in his fund. 8% growth profile over the next 10 years, 4% dividend. This is probably his number one for the long term.

We are seeing a downtrend break. It is pretty positive. We would want it to be more robust in breaking out. There is a double bottom, however.