Enbridge keeps Line 5 open

Article Excerpt

ENBRIDGE $44.80 is a #1 Buy for 2021. The firm (Toronto symbol ENB; Shares outstanding: 2.0 billion; Market cap: $94.5 billion; TSINetwork Rating: Above Average; Dividend yield: 7.1%; www.enbridge.com) has been ordered by the State of Michigan to shut down its 67-year-old Line 5 pipeline. Line 5 pumps crude oil from Western Canada under the Straits of Mackinac (between Lake Michigan and Lake Huron) to refineries in Detroit, Michigan, and Sarnia, Ontario. The Michigan government fears that a leak would cause significant environmental damage. In response to those concerns, Enbridge plans to construct a new $500 million underground tunnel to house Line 5’s pipelines. A court is currently mediating the dispute, so Line 5 continues to operate. But even if Enbridge had to shut down Line 5, that would cut its annual cash flow by just 5%. Moreover, the extra cash flow from the company’s planned $17-billion spending on new growth projects (which should start up between 2021 and 2023) would…

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