Merging businesses will cut costs

Article Excerpt

ENBRIDGE INC. $44 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 1.6 billion; Market cap: $70.4 billion; Price-to-sales ratio: 1.7; Dividend yield: 6.1%; TSINetwork Rating: Above Average; www.enbridge.com) operates pipelines in Canada and the U.S. In addition, it owns oil and gas storage facilities. Ontario regulators have approved the merger of Enbridge’s natural gas distribution operations with Union Gas Ltd. That company was part of Spectra Energy, which Enbridge acquired in February 2017 for $37 billion in stock. The combined entity will have 3.6 million residential and commercial customers in Ontario, or about 99.8% of all natural gas customers in the province. However, Ontario’s Energy Board will still set gas rates. Enbridge initially expected the merger to save it $680 million over a 10-year period. However, that estimate could change due to conditions imposed by regulators. The new Ontario government has also ordered the company to stop collecting carbon taxes on natural gas sales, and that could also impact its savings…