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

Zacks Equity Research
·2 min read

Enbridge Inc. ENB has witnessed upward earnings estimate revisions for 2024 in the past 30 days.

Factors Favoring the Stock

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

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

Some better-ranked energy companies include Vitesse Energy Inc VTS, ProPetro Holding Corp. PUMP, and SM Energy Company SM. While Vitesse Energy sports a Zacks Rank #1 (Strong Buy), ProPetro Holding and SM Energy carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vitesse Energy has non-operated working and mineral interests in oil and gas assets, mainly across the prolific Bakken in North Dakota. Having interests in 6,932 productive wells, Vitesse Energy has secured a solid production outlook, assuming that the crude pricing scenario will remain extremely favorable.

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.

To enhance its key asset portfolio, SM Energy has agreed to acquire oil and gas assets in the Uinta Basin from XCL Resources for $2.55 billion.

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SM Energy Company (SM) : Free Stock Analysis Report

Enbridge Inc (ENB) : Free Stock Analysis Report

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

Vitesse Energy, Inc. (VTS) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research