Enbridge (ENB.TO)

It is a tolling business. It has been punished unfairly. This is true of a number of companies in the mid-stream business. The infrastructure businesses are not bad at all. They have steady income and are hard to complete with. This is a good time to go bottom fishing.

He just added to it a couple of weeks ago. The whole sector has been hit. ENB-T is one of the great asset managers out there. They are the toll booth of the North American economy.

Oil Prices and Pipelines. He owns ENB-T. He would go for it for the US exposure. Best exposure going forward. It will have dividend growth. You need this to lean into higher rates.

This has been one of those great names since the mid-1950s when they first built a pipeline in Canada. Has a wonderful disciplined management team with good long-term growth potential. It just happens to be in the wrong sector. Dividend yield of 4.7%.

Big pipeline company and owns things like Enbridge Gas. Did really well, along with all the utility and pipeline stocks when people were looking for yield. As people recently started getting worried that interest rates in the US might start going up along with bond yields, all interest sensitive stocks came out. Part of this company’s drop has to do with projects they wanted to do. Getting interesting at this level, and he is actively looking at adding this.

It had an uptrend from ’09 to last summer. We had an uptrend and then it broke down. He thinks now it will be dead money, but you won’t get hurt. There is a little increase in volume. If we get above $46 with volume that is positive.

Just raised their dividend by 14%. Has relatively good growth. Remember that this is a provider of services to the energy industry; they don’t suffer directly from the commodity itself. They get a fee for service for tolling hydrocarbons through their system. It’s a good company, but there is just not as much growth as there might be in a healthcare or technology stock. Good yield play and shows good growth. Dividend yield of 4.8%.

Likes this and is putting new money in for new accounts. Has been a great stock longer-term. They have some major projects on the books of about $21 billion, with about all but $5 billion being internally funded without having to go to the market. They are talking about a 14% annual average growth rate out to 2018. If you are looking out 2-4 years, this is a great buy. Dividend yield of 5.16%.

Decline in share price picked up speed after Kinder Morgan (KMI-N) cut their dividend. A lot of institutional money managers are starting to question if Enbridge will be cutting their dividend. He likes this company and continues to hold it. Thinks the dividend is safe.

A wonderful company, great management and a good solid dividend. Sold his holdings because he thought that coming into the summer, pension funds who were buying it for the dividend, would be starting to sell. With the correction that we have had in a lot of the names, he is starting to look at coming back in.

Mastered Limited Partnerships were very popular for a while, but have been under a lot of pressure over the last year or 2. Feels this company has been dragged down with that. Their revenues are largely contracted so there are not real issues in the short term, but the multiples have been compressing. They have lots of growth prospects in pipelines, but people are worried that they’ll need to raise equity and the plans will get shelved which brings down the multiple. Reasonably priced, but it is going to take a change in sentiment before it turns around.

This is not in a good situation. Best not to add to it. Perhaps look at it in January or February.

He has been negative on pipelines for some time because the valuations are excessive. Then on Friday he bought TRP-T. He is positive for the first time in 5 years. They are starting to come down to arrange where they are safe for investing. This one is still a sell, though.

How they have structured their business is really tricky, and he has yet to find the answer.

Enbridge (ENB-T) or Toronto Dominion (TD-T)? TD is the one you should buy. This one has turned into a financial engineering exercise. It is a pipeline company that is pushing investments down into special-purpose entities, and it has a huge financial restructuring that is going on. Putting incredible strain on investors. If and when interest rates were ever to rise or there is a real change in energy consumption patterns, this could have a lot of strain.