Enbridge (ENB.TO)

Likes the company and recently added it for his clients. Thinks the long-term outlook is good. The dividend is not only safe, but growing. Likes companies that raise the dividends on a regular basis and this company is doing that.

TD Bank (TD-T) and Enbridge (ENB-T) in a TFSA? This has had a definite breakdown. An old support level at around $45 was broken. It is trying to rally back up to that, which is what he would call the neck line level. If it can break that to the upside, it might be positive, that to him it is still just a test. Not sure if he would own this one for the long run.

His work entails looking at stock prices relative to “his” adjusted Book Values. This company got way overvalued at $70, and way over its Fair Market Value. All the pipelines look exactly like this, getting way above FMV. They have fallen back to their FMV’s, and some a bit below. (See Top Picks.)

Payout ratio has crept up a lot. As far as he can see 95% of their earnings are contracted out for the next 3 years. There is still a lot of bottlenecks in the system. Thinks you will be okay with this and you will get paid your dividend. Ultimately however this stock will start to trade on visibility, post 2018-2019, if oil prices remain low.

This has probably been the worst of the pipelines, so it is yielding 5.14%. Have already announced their dividend increase for 2016 of about 14%-15%. Based on the rate base they already have, and about $20 billion of CapX over the next few years, he expects them to increase their dividend at a 10% rate for the next 3 years.

The market has been too hard on them. Large pipelines in the US have come down a lot. There is a general concern their suppliers of oil might go bankrupt. There is a concern that they can’t fund projects. He disagrees with all of that. They have a deep line of sight into where their business comes from. You look at free cash flow growth and the yield on that is about 10% so they can grow the dividend in the low to mid-teens.

Pipelines as a group have been punished quite severely over the last few months with the slash in energy prices. Feels you could start initiating a position. The dividend is quite safe. They have projects in place for the next few years that is going to give them cash flow growth, and they have indicated they intend to grow their dividends at the same pace. She is expecting dividend increases of 12%-15% for the next few years.

The share price has been really beaten up over the last two weeks. It has been painted by the brush that has affected anything in the energy space. This is one of the few paces he has exposure in the space. It is the least risky. The barrier to entry is quite high so they have competitive advantage. You are being paid to be here.

Has always admired management, but you are paying quite a premium for this company. He would be loath to sell, but wouldn’t be buying at current levels.

A dividend entity that is large and going to be around for a long time. Great management team. Has been disproportionately hurt along with the other pipelines and energy companies. There is good value here. If oil prices keep going down the way they are, this is still a buy. Nice dividend yield. Have a lot of debt, but pipeline companies do have a lot of debt. If they had to get financing, they would have no problem.

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.