Investors can count on this dividend

Article Excerpt

ENBRIDGE INC. $40 is a buy. The company (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 2.0 billion; Market cap: $80.0 billion; Price-to-sales ratio: 1.6; Dividend yield: 8.1%; TSINetwork Rating: Above Average; 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 3.7 million consumers in Ontario and Quebec. The stock has dropped 27% in the past two months. That reflects lower oil and natural gas prices, which investors fear will hurt the company’s cash flows. However, Enbridge’s transformation in the past few years—such as eliminating its complex holding-company structure and its 2017 purchase of U.S. pipeline operator Spectra Energy for $37 billion in stock—puts it in a stronger position to weather the current downturn. As well, 98% of its shipping activities are backed by take-or-pay contracts, which oblige clients to pay whether or not they use their contracted pipeline space. That should help protect your dividends. Enbridge, in…

You are trying to access subscriber-only content.

To read this article, you may subscribe or sign in.
If you are already a subscriber, log in here.

If you wish to become a subscriber, click here. Or you may enjoy access to all our publications when you become a Member of Pat McKeough's Inner Circle Pro.