Enbridge (ENB.TO)
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For me, buy and hold, live off the divvy...but u r correct, it seems they can’t catch a break...
Despite all the hype and hoopla and risk and concern and headlines, in the end shutting down a state's entire oil supply is not practicable and Line 3 will be proceeding. All good news for ENB with no major regulatory challenges really left for them at this point on any of their projects. And a really nice 5.8% dividend yield to boot. Even though the stock is up 25% since Sep plus two dividends, it trades at a discount still to peers like TRP and PPL. Now my biggest holding just because of the gain, I remember being a big buyer of this two years ago in the $39-41 range. Dividend is up 20% since then.
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So, I've decided that I will no longer be adding to any O&G stocks but I've got an almost 4% position in ENB (but won't be adding anymore). I'm struggling to figure out what will happen to pipelines in the eventual slow down of oil.
I know that ENB is investing in renewables (wind and solar) and it's not like we'll stop using pipelines in the next 10 years but I feel that after 20 years the energy landscape will have a negative impact on hyderocarbons. Is this why IPL and PPL are making plastics factories?
Maybe ENB will change into a renewable energy provider in the distant future? Maybe they'll convert the pipelines to transport beer (look it up!!!)? https://www.theguardian.com/world/2016/jul/08/bruges-pipe-dream-a-reality-beer-pipeline
I know that ENB is investing in renewables (wind and solar) and it's not like we'll stop using pipelines in the next 10 years but I feel that after 20 years the energy landscape will have a negative impact on hyderocarbons. Is this why IPL and PPL are making plastics factories?
Maybe ENB will change into a renewable energy provider in the distant future? Maybe they'll convert the pipelines to transport beer (look it up!!!)? https://www.theguardian.com/world/2016/jul/08/bruges-pipe-dream-a-reality-beer-pipeline
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Firstly, need to remember ENB in particular has a strong US presence, more so than TRP but still.. both have significant operations in the USA. I don't see oil demand rolling over (shrinking) for another 10+ years, and I suspect NG demand will keep increasing as coal fired generation is phased out and NG peaking plants will be necessary to stabilize the grid from notoriously cyclic renewable wind and solar farms.
IF that is the case, the new growth will be in NG shipping capacity additions, and oil will hold its own...for the most part. That will limit growth of the asset base and revenue increases so I wouldn't pay growth multiples on either stock for long. At the same time, as long as both of these companies invest smartly with 20-25 year shipping contracts to mitigate the risk of stranded assets, and only invest where the opportunities are likely to be sustained, these stocks will be cash generators for a very long time. I see at least a 20+ year runway which exceeds my remaining time in a vertical position.
IF that is the case, the new growth will be in NG shipping capacity additions, and oil will hold its own...for the most part. That will limit growth of the asset base and revenue increases so I wouldn't pay growth multiples on either stock for long. At the same time, as long as both of these companies invest smartly with 20-25 year shipping contracts to mitigate the risk of stranded assets, and only invest where the opportunities are likely to be sustained, these stocks will be cash generators for a very long time. I see at least a 20+ year runway which exceeds my remaining time in a vertical position.
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Interesting news indeed. At least he took a few days off to relax.
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nice finish Alta.
this is from Morningstar (May 7th).
Even with our lower estimates, we think the dividend looks more than safe.
Our near-term outlook is already baked into our valuation, and we don’t see any changes to our long-term outlook. Accordingly, we are maintaining our CAD 57 fair value estimate but lowering our U.S. fair value to $40 based on foreign exchange movements. The stock soared on the strong earnings release and is up over 6%. Despite the uptick, we still see significant upside coupled with the top-end dividend yield. Wide-moat and 5-star-rated Best Idea Enbridge remains one of our top picks in the energy sector. We think that the market is mistaken to price Enbridge as if oil prices will remain weak forever. However, we don't expect the market's concerns to be fully addressed for some time, which can lead to volatile swings in the stock.
that said, there will not likely be any dividend increases. I am buying on weakness (last time I bought was at 41 - trying to DCA this back into the green zone)
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And the story continues:
Enbridge Line 3 clears important hurdle as U.S. Army Corps awards federal permit, hopes to start construction of pipeline before the end of the year.
Enbridge Line 3 clears important hurdle as U.S. Army Corps awards federal permit, hopes to start construction of pipeline before the end of the year.
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Saw an article that indigenous groups were starting another lawsuit to stop it because , wait for it....the influx of workers would increase their risk of getting c19!
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The saga continues.
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