ENBRIDGE INC. (Toronto symbol ENB; www.enbridge.com) operates the world’s longest crude oil and liquids pipeline system. It also distributes natural gas to consumers in Ontario, Quebec, New Brunswick and New York State. As well, Enbridge has interests in 1,800 megawatts of renewable and alternative energy.
In the three months ended December 31, 2013, the company’s revenue rose 18.4%, to $8.3 billion from $7.0 billion a year earlier. Before one-time items, earnings per share rose 4.8%, to $0.44 from $0.42.
In 2013, Enbridge brought 17 projects, worth a total of $5 billion, into service. It plans to start up a further $29 billion worth over the next four years. That includes a $7-billion replacement of part of its Mainline system, which pumps crude oil from Edmonton, Alberta, to Superior, Wisconsin.
Enbridge has paid dividends since it started trading publicly in 1953 and has raised its payout for the past 18 years. It just raised its quarterly dividend by 11.1%, to $0.35 from $0.315. It now yields 2.8%.
Dividend stocks: TransCanada hikes dividend for 14th consecutive year
TRANSCANADA CORP. (Toronto symbol TRP; www.transcanada.com) operates 68,500 kilometres of natural gas pipelines in Canada and the U.S. It also has interests in over 11,800 megawatts of power generation, including the Bruce Power nuclear plant.
In the three months ended December 31, 2013, TransCanada’s revenue rose 11.6%, to $2.3 billion from $2.1 billion a year earlier. Earnings per share rose 28.9%, to $0.58 from $0.45.Roughly 31% of
The company completed $6.1 billion worth of projects in 2013, and it has $38 billion of additional projects secured by long-term contracts scheduled for completion by 2018. That includes a further $3.2-million investment in the proposed Keystone XL pipeline, which would pump crude oil from Alberta to Steele City, Nebraska.
TransCanada has raised its dividend annually for the past 14 years. It just raised its quarterly payout by 4.3%, to $0.48 a share from $0.46. The new annual rate of $1.92 yields 3.7%.
In the latest issue of Canadian Wealth Advisor, we look at Enbridge’s outlook for 2014 and whether its earnings and dividend can continue to grow. We also consider TransCanada’s long-term growth prospects, with or without a timely agreement on the Keystone XL pipeline. We conclude with our clear buy-hold-sell advice on these two stocks.
If you’re a member of Pat’s Inner Circle and you’d like to ask a question about today’s article, please go to the question page reserved for you (be sure you’re logged in first). Click here to ask your question.
COMMENTS PLEASE—Share your investment knowledge and opinions with fellow TSINetwork.ca members
As more energy is extracted in North America, do you expect to see a surge in the growth of pipelines? Do you think they will benefit from the debate over the relative safety of shipping oil by rail or by pipeline? Do you already look at pipeline companies as potential growth stocks? Or do you mainly invest in them for the long-term dividends?
Comments
David
Pat,
I agree with you about these companies.
Enbridge has done well for me. A 40% profit from 2004-2010. I then bought back in and now the shares show an increase by over 70% since 2010. My current yield is about 4.85%.
Transcanada bought in 2002 currently stands up about 58% with a yield of around over 6%. Another holding in a RRIF bought in 2009 is currently up around 31% with a yield of just shy of 5%.
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X No, I don’t want to make steady income from dividends.
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Pat,
I agree with you about these companies.
Enbridge has done well for me. A 40% profit from 2004-2010. I then bought back in and now the shares show an increase by over 70% since 2010. My current yield is about 4.85%.
Transcanada bought in 2002 currently stands up about 58% with a yield of around over 6%. Another holding in a RRIF bought in 2009 is currently up around 31% with a yield of just shy of 5%.
All holdings are in DRIP accounts.