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Here's Why Hold Strategy is Apt for Enbridge (ENB) Stock Now

Enbridge Inc. ENB has witnessed upward earnings estimate revisions for 2024 in the past seven days.

Factors Favoring the Stock

Currently carrying a Zacks Rank #3 (Hold), Enbridge is among the leading midstream energy players in North America. It’s energy infrastructure includes one of the world’s longest crude oil pipeline network.

With a significant portion of its assets being contracted by shippers for the long term, its business model is less exposed to volatility in oil and gas prices. Backed by long-term contracts, Enbridge’s business model has considerably lower volume risk exposure.

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ENB has secured approximately C$25 billion in growth capital projects, slated for completion by 2028. This initiative is expected to bolster the company's cashflows in the years ahead.

The midstream company is strongly dedicated to consistently returning capital to shareholders, a commitment supported by 29 consecutive years of annual dividend increases.

Risks

Compared to composite stocks belonging to the industry, Enbridge’s balance sheet has more debt exposure. Moreover, the leading midstream energy player’s bottom line is affected by increasing operating and administrative costs.

Stocks to Consider

Better-ranked energy companies include Sunoco LP SUN, ProPetro Holding Corp. PUMP and Eni SpA E. All the stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sunoco, the leading independent fuel distributor in the United States, has a stable business model and relatively lower exposure to commodity price volatility. This is because the partnership distributes fuel to branded distributors under long-term contracts.

The business scenario for ProPetro Holding is bright, given the current favorable oilfield service demand. Thus, it secures handsome cashflows as it is a leading provider of pressure pumping and other complementary services. For 2024 and 2025, ProPetro Holding has witnessed upward earnings estimate revisions over the past 30 days.

Eni is leading the energy transition as well. The integrated energy player has been building a full set of decarbonized products and services for clients to achieve carbon neutrality by mid-century. Even though the energy business scenario is challenging, Eni’s efficient exploration keeps it highly competitive.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Eni SpA (E) : Free Stock Analysis Report

Sunoco LP (SUN) : Free Stock Analysis Report

Enbridge Inc (ENB) : Free Stock Analysis Report

ProPetro Holding Corp. (PUMP) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research