Enbridge locks in your value

Article Excerpt

ENBRIDGE INC. $38.63, is a buy. The company (Toronto symbol ENB; Shares outstanding: 2.0 billion; Market cap: $78.2 billion; TSINetwork Rating: Above Average; Dividend yield: 8.4%; 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 consumers in Ontario and Quebec. The stock is down 23% in the past month (although it was down as much as 34%), largely due to fears that the sudden collapse in oil and gas prices will hurt volumes on its pipelines. However, 98% of its shipping contracts are backed by take-or-pay contracts, which oblige customers to pay regardless of whether they use their contracted pipeline space or not. What’s more, well-capitalized oil refiners and integrated producers account for 97% of Enbridge’s oil pipeline revenue. The gas pipeline division gets 91% of its revenue from investment-grade customers. Those steady cash flows should help protect your dividend payments, and the stock now yields a high 8.4% for investors. investors…

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