Enbridge Inc. ENB expects increased core earnings for 2024. The company has elevated its dividend outlook for 2024, banking on a rise in demand to boost the volumes transported through its network.
The positive outlook is based on the anticipated increase in demand, supported by the ongoing trend of growing profits in the Canada oil and gas transportation sector. The sector’s profitability is thought to result from diminished U.S. inventory levels and a significant shift in exports toward alternatives to Russia oil, spurred by Russia’s invasion of Ukraine.
The company foresees an 8% increase in drilling activities by Canada oil and gas producers in 2024, a development expected to drive the utilization of pipelines. Enbridge is projecting a core profit of C$9.3 billion from its liquids pipeline business. This is the primary unit of the company, supported by robust system utilization.
Enbridge anticipates deploying C$6 billion in capital in 2024, inclusive of maintenance expenditure. The company projects adjusted core earnings of C$16.6-C$17.2 billion for next year, surpassing its 2023 expectations of C$15.9-C$16.5 billion.
Enbridge is strategically positioned to sustain consistent growth well into the future. The company secured an additional $7 billion in organic projects since the beginning of the year. The expansion has elevated the secured backlog to $25 billion, with an additional boost of more than $3 billion from highly strategic and accretive tuck-in acquisitions.
In alignment with this optimistic financial outlook, the company has announced a 3.1% increase in the dividend for 2024. Enbridge will pay out a quarterly dividend of 91.5 cents per share, effective from the dividend payable on Mar 1, 2024. This signifies the 29th consecutive annual dividend hike for the company.
Enbridge, having proposed a $14-billion bid to acquire three utilities, has confirmed securing funding for more than 75% of the total purchase price. The deal would not only double the company’s gas distribution business but also establish North America’s largest natural gas provider.
Zacks Rank & Stocks to Consider
Enbridge currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Murphy Oil Corporation MUR possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies and independent E&P group.
The company has a long history of increasing the value of its shareholders, courtesy of steady cash flows. Its board of directors approved a 10% increase in the quarterly dividend rate beginning in the first quarter of 2023, taking the total annualized figure to $1.10 per share. The company's current dividend yield is 2.57%, better than the Zacks S&P 500 composite's average of 1.7%.
Suncor Energy, Inc. SU is Canada’s premier integrated energy company. Suncor boasts an impressive supply-chain network, owning significant oil sands and conventional production platforms.
Suncor's robust liquidity position will allow it to sustain its dividend, even if oil prices stay lower for longer. Notably, the company recently hiked its dividend by 5% to 54.5 Canadian cents per share (over the prior quarter) and increased the buyback authorization to roughly 10% of its public float.
Liberty Energy LBRT reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of earnings of 74 cents. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.
Liberty’s board of directors announced a cash dividend of seven cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. This dividend reflects a 40% rise from the previous quarter’s level. As part of its shareholder return policy, LBRT repurchased shares worth $29 million at an average price of $16.38 per share.
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