Enbridge Income Fund Holdings (ENF.TO)

Can you explain the price of Enbridge buying ENF? Can retail investors try for a better deal? Premium is not large, but company is extolling virtues of accretion, and ENB pays an attractive dividend. If institutions are on board, hard for retail investors to get their say in. When companies consolidate, there are usually some savings.

Enbridge now plans to buy this back, along with some other subsidiaries. He views this as positive because it simplifies the structure of Enbridge, which he owns. He has trimmed ownership of Enbridge because he is concerned that the rising dividend might not be sustainable. He wishes that Enbridge would slow the growth of its dividend because the company has a big spending pipeline and needs the money. This is another defensive company. There is risk to the economy at the end of next year and this would be a good company to hold at that future time.

You are about to lose your holding because they are buying it back. It is not close to fair market value. Institutional shareholders may fight back, but it is largely held by individuals. He cannot offer much help. He is hoping something good will happen.

(A Top Pick May 28/17, Down 7%) It has a 7-8% dividend yield and is being bought out by the parent. He will continue to hold on thinking there is still more upside.

The parent, Enbridge, will take this in. Since that news, the Fund has lifted and is trading in line with ENB. He thinks the pipelines are a good place to be now. He sees good growth here and you're being paid a decent dividend.

He has a negative view on them as a whole. The parent has really struggled. The challenge is where growth comes from. It is difficult to get new pipelines built. It has a rich valuation. It has a very strong brand and that has hurt them because people invest in them without doing due diligence. It is less about the business than what you pay for it. Moody's downgraded them recently.

The yield is 8%-plus. It is a drop-down vehicle for energy assets in Canada, not affected by the issues that Enbridge is facing in the United States. The payout ratio is reasonable. The parent company is struggling, and has the ability to force the dropdown firm to accept new assets, which can be a problem. There are procedures to protect shareholders, but it still makes him a bit nervous. There’s a lot of negativity toward pipelines, and toward Enbridge in particular, but he doesn’t think it applies to this one.

She owns ENB instead. The dividend is safe. The overhang is the Line 3 expansion awaiting final approval from Minnesota, expected to come in mid-2018. The company is confident this will happen, since it has gotten approvals elsehwere. If this happens, it will be a definite catalyst for both stocks. You can buy a half-position now and see later if the decision is positive.

What's the relationship between Enbridge and its Income Fund? It's complex. Enbridge owns 90% of the Fund which traditionally trades at a higher multiple. The board will clean up the structure. The equity issues at the fund level will ultimately roll up into Enbridge. It's basically two different ways for them to issue capital for two different purposes.

In response to a question about the impact of the Minnesota judge’s recommendation today of a route for its pipeline that Enbridge likes less: He doesn’t own Enbridge but he saw the news. He sees this as a temporary setback, doesn’t think this will have a material longer term effect on the price or the dividend. However, this might temporarily affect Canadian oil flows south.

IPL-T or ENF–T. As a long term hold they are okay. He would prefer that rather than a single company he would like ZWU-T because you get all the pipelines and telecoms and a covered call overly. You are very diversified within Canada. North of a 6% yield. This is nice as a long term hold.

It has a terrific yield. Almost 8% and it is covered. It has been trading in its range for the last 5 years and it is back down. A good balance sheet. He really likes it. (Analysts’ target: $32.67).

She owns the parent of Enbridge, instead. The overhang is final approval from Minnesota for Enbridge's U.S.-Canada pipeline; this approval should come by June. Management is confident that the approval will come, which could lift this stock. A plus: fears of interest rate hikes and their effect on interest-sensitive stocks have moderated since the winter. Overall, we need pipelines out west and the Trans Mountain outcome will be important.

The market is currently negative on energy infrastructure and Enbridge is being impacted by how the parent is going to finance future projects. There is also some fear that the great assets passed down from the parent may one day be taken back in. In the US some negative tax rulings on Master LLPs may cause changes.

He does generally think this is a good holding. He thinks there are US regulatory headwinds, but is not an expert. There is a strong downtrend in place and it is early to say it has found a bottom. He would want to see a positive shift in fundamentals first.