Enbridge Inc.
ENCANA CORP., $20.37, Toronto symbol ECA, continues to produce more oil and natural gas liquids (NGLs), such as ethane, propane and butane. NGLs tend to be priced at the same level as crude oil. The company is shifting toward oil and NGLs because low natural gas prices are cutting profits at its regular gas business, which supplied 95% of its overall production in the first quarter of 2012. Encana does not plan to cut its natural gas production. This week, Encana announced that it will spend an extra $600 million (all amounts except share price in U.S. dollars) on its oil and NGL properties this year. The company had originally planned to spend $2.9 billion on all of its capital projects in 2012....
CANADIAN PACIFIC RAILWAY LTD., $73.54, Toronto symbol CP, has resumed normal operations now that Ottawa has ended an eight-day strike by its locomotive engineers, conductors and yard workers. The strike probably cut CP’s earnings per share by around $0.20 in the second quarter of 2012. The company earned $0.82 a share in the first quarter. At CP’s recent annual meeting, U.S.-based activist investment firm Pershing Square Capital Management, which owns 14.2% of the company, succeeded in replacing seven of CP’s 16 directors with its own nominees....
ENBRIDGE INC. $39.40 (Toronto symbol ENB; Shares outstanding: 784.9 million; Market cap: $30.9 billion; TSINetwork Rating: Above Average; Dividend yield: 2.9%; www.enbridge.com) has announced several upgrades to its oil pipelines. One of these improvements is a plan to reverse the flow of its pipeline between Montreal and Sarnia, Ontario. Right now, the line pumps oil from Montreal to Sarnia. Reversing the flow will let Enbridge supply more oil from western Canada to refineries in Ontario and Quebec. That will improve demand from refiners, because it will let them cut their reliance on higher-priced imported oil. Enbridge also plans to expand other pipelines to take better advantage of rising production of shale oil in the Bakken area, which covers parts of Montana, North Dakota and Saskatchewan....
ENBRIDGE INC. $40 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 785.0 million; Market cap: $31.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.enbridge.com) owns 100% of Enbridge Gas New Brunswick Inc. (EGNB), which distributes natural gas to 11,000 customers in that province. Enbridge is now expanding EGNB’s system to connect to an additional 30,000 clients.
However, the New Brunswick government recently enacted new regulations that limit the rates that EGNB can charge its customers. That makes it harder for Enbridge to recoup the funds that it has already invested in this business. As a result, the company will write down this investment by $262 million. That’s equal to 24% of the $1.1 billion, or $1.48 a share, that Enbridge earned in 2011.
Enbridge is still a buy.
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However, the New Brunswick government recently enacted new regulations that limit the rates that EGNB can charge its customers. That makes it harder for Enbridge to recoup the funds that it has already invested in this business. As a result, the company will write down this investment by $262 million. That’s equal to 24% of the $1.1 billion, or $1.48 a share, that Enbridge earned in 2011.
Enbridge is still a buy.
...
CANADIAN PACIFIC RAILWAY LTD., $74.11, Toronto symbol CP, rose 1% this week after U.S.-based activist investment firm Pershing Square Capital Management, which owns 14.2% of the company, succeeded in replacing seven of CP’s 16 directors with its own nominees. CP’s chairman, John Cleghorn, and chief executive officer, Fred Green, also resigned. Pershing Square will probably try to install Hunter Harrison, the successful former CEO of CN Rail, as CP’s new chief executive officer. Even if CP hires someone other than Mr. Harrison, the company will continue to work on improving its efficiency by purchasing new locomotives, upgrading its tracks and streamlining its schedules....
ENBRIDGE INC. $40 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 785.0 million; Market cap: $31.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.enbridge.com) owns 100% of Enbridge Gas New Brunswick Inc. (EGNB), which distributes natural gas to 11,000 customers in that province. Enbridge is now expanding EGNB’s system to connect to an additional 30,000 clients. However, the New Brunswick government recently enacted new regulations that limit the rates that EGNB can charge its customers. That makes it harder for Enbridge to recoup the funds that it has already invested in this business. As a result, the company will write down this investment by $262 million. That’s equal to 24% of the $1.1 billion, or $1.48 a share, that Enbridge earned in 2011. Enbridge is still a buy....
ENBRIDGE INC. $40.94 (Toronto symbol ENB; Shares outstanding: 784.6 million; Market cap: $32.1 billion; TSINetwork Rating: Above Average; Dividend yield: 2.8%; www.enbridge.com) plans to build a new pipeline that would pump shale oil from the Bakken region of North Dakota to refineries in the U.S. and Canada. If it can sign up enough oil shippers, this new line would increase Enbridge’s capacity in the region by 67,000 barrels a day by the end of 2013. Right now, the company’s North Dakota pipelines can pump 210,000 barrels a day. The new line would cost $650 million. However, investments like this will help the company take advantage of North Dakota’s rising oil production, which has quadrupled since 2005. Enbridge is a buy....
ENBRIDGE INC. $39.42 (Toronto symbol ENB; Shares outstanding: 782.2 million; Market cap: $30.8 billion; TSINetwork Rating: Above Average; Div. yield: 2.9%; www.enbridge.com) continues to expand in the U.S.
In November 2011, the company agreed to buy half of the Seaway pipeline for $1.15 billion U.S. Enterprise Product Partners LP owns the other half and operates the pipeline.
Right now, Seaway pumps crude oil from Houston, Texas, to storage facilities in Cushing, Oklahoma. But the partners plan to reverse the line’s flow by mid-2012.
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In November 2011, the company agreed to buy half of the Seaway pipeline for $1.15 billion U.S. Enterprise Product Partners LP owns the other half and operates the pipeline.
Right now, Seaway pumps crude oil from Houston, Texas, to storage facilities in Cushing, Oklahoma. But the partners plan to reverse the line’s flow by mid-2012.
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CANADIAN PACIFIC RAILWAY LTD., $76.45, Toronto symbol CP, reported higher-than-expected earnings this week. In the three months ended March 31, 2012, the company’s earnings soared 317.6%, to $142.0 million from $34.0 million a year earlier. Earnings per share rose 310.0%, to $0.82 from $0.20, on more shares outstanding. That beat the consensus estimate of $0.75 a share. Severe winter weather and avalanches in B.C. delayed the company’s trains and depressed the year-earlier results. This was the main reason for the earnings jump....
ENBRIDGE INC. $39.42 (Toronto symbol ENB; Shares outstanding: 782.2 million; Market cap: $30.8 billion; TSINetwork Rating: Above Average; Div. yield: 2.9%; www.enbridge.com) continues to expand in the U.S. In November 2011, the company agreed to buy half of the Seaway pipeline for $1.15 billion U.S. Enterprise Product Partners LP owns the other half and operates the pipeline. Right now, Seaway pumps crude oil from Houston, Texas, to storage facilities in Cushing, Oklahoma. But the partners plan to reverse the line’s flow by mid-2012....