Consolidation plan a plus for ENB

Article Excerpt

ENBRIDGE INC. $42 (Toronto symbol ENB; Income-Growth Dividend Payer Portfolio, Utilities sector; Shares outstanding: 1.7 billion; Market cap: $71.4 billion; Dividend yield: 6.4%; Dividend Sustainability Rating: Highest; www.enbridge.com) operates pipelines that pump oil and natural gas from Western Canada to eastern Canada and the U.S. It also distributes gas to over 3.7 million consumers in Ontario, Quebec, New Brunswick and New York State. Under a new plan to simplify its corporate structure, Enbridge now plans to acquire 100% of four affiliate firms that operate pipelines and other assets. In all, it will pay $13.6 billion in cash and shares. Owning 100% of those businesses should improve the company’s credit rating and make it easier to fund new projects. Enbridge still expects to increase its annual dividend rate by 10% each year through 2020. The current rate of $2.68 a share yields a high 6.4%. Enbridge is a hold. hold…

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