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Enbridge Inc. (ENBFF)
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Canadian midstream giant Enbridge is expecting to have a $2 billion problem in 2022. How will it solve the dilemma?
Enbridge ( ENB 0.86% ) has a massive collection of midstream assets constantly throwing off cash. That's great for investors, which benefit from the Canadian giant's well-covered 6.8% dividend yield, but it is about to create a quandary for management. How will this company deal with the extra $2 billion in cash flow it expects to generate in 2022?
Enbridge's business is fairly simple to understand. It operates as a toll taker, collecting fees for the use of its infrastructure assets. Roughly 54% of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) comes from oil pipelines, 29% from natural gas pipes, 14% from a natural gas utility operation, and 3% from its renewable power business. It is a big player in each area, sporting a huge $80 billion or so market cap. In fact, when it comes to the midstream company's oil and natural gas assets, it is an indispensable part of the energy transportation system.
That's a nice problem
On the one hand, it's a pretty good "problem" to have excess cash just burning a hole in management's pocket. On the other hand, that's a lot of money that needs to be put to work in some fashion.
The most logical thing to do, simplistically speaking, would be to give it to the company's owners -- Enbridge shareholders. There's only one problem: As CFO Vern Yu noted during Enbridge's third quarter 2021 earnings conference, "we don't believe the market's fully valuing the level of the dividend that we provide today." He made sure to point out that dividend growth was important to the company, but if the stock isn't responding to dividend increases the way management would like (by appreciating in value), it's not likely that management will push too far in this direction. That leaves new capital investment, acquisitions, debt reduction, and stock buybacks.
Yes let's sell the energy distribution stock during a shortage of energy due to higher demand of distribution. Stock market logic 101
At some point investors they will weak up and buy this company shares
Under $50 I’ll keep buying this sock for the rest of my life
Because 7% dividends it’s too high to pass on for a blue chip company
Enbridge closed at a 7.02% divvy. And if history is a guide, a dividend increase is around the corner.
Think there's alot of old ex pot stock traders on this board!
just buy the dip sit back and relax... this stock is for the long run! Meanwhile enjoy the divi
Uh oh, Enbridge making too much cash. This market is crazy 😝
Was going to just pay off my mortgage, but picked up 2k shares so Enbridge can pay it for me 🥰
It's stressing the price is dropping but as long as it continues paying a dividend and people need oil. Doesn't matter what the price is unless you need the money. The stock will go down and up a little, I bought the stock for a regular dividend, don't expect it to double or it to totally collapse. When oil went up and down paid the same dividend.
The South African doctor who first identified the omicron variant that is spreading in the country and abroad has described the symptoms as she observed them in her patients, stating that the strain is so far producing “very, very mild” effects.
Dr Angelique Coetzee told BBC News that she had first noticed the symptoms in a young, male patient around the age of 30 whom she normally knew to be very healthy. He was “extremely tired” as well as having “body aches and pains with a bit of a headache,” a “scratchy” rather than sore throat, and no cough or loss of taste or smell, she said.
What are the symptoms of the omicron variant?
Coetzee tested the man for Covid-19 and found him to be positive, then tested his family and found them all to have the virus, despite showing only “very, very mild symptoms,” she said. For the rest of the day, people kept presenting at her surgery with similar symptoms, and all tested positive. Noticing that the symptoms seemed to differ from the delta variant, which had hitherto been the most prevalent form of covid globally, she alerted the country’s vaccines committee, of which she is a member. They announced their resultant discovery of the omicron variant a few days later.
Perhaps reassuringly for those who are worrying about this new development, Coetzee noted that none of the cases she knew of were serious. “What we are seeing clinically in South Africa, and remember that I’m at the epicenter, that’s where I’m practicing, is extremely mild…We haven’t admitted anyone [to hospital]. I spoke to other colleagues of mine: The same picture,” she told the BBC.
However, she did caution that the picture might change in the next weeks.
Read only if you are a Long Term Investor and want to Leave behind a Will that will Satisfy your Heirs;
Enbridge at any Price below $50.00 is an excellent Bargain for your TFSA or any other Tax Free Savings Account. The Dividend Rate is reaching 7% Annually. Investing $100,000.00 into Enbridge will yield you $7,000.00 Annually and $70,000.00 in 10 Years. By Reinvesting your Dividends you can Double your Investment in 10 Years. Enbridge has a Decades long History and will continue to thrive for another 40-50 Years+ This is how you make Money work for You and your Future!
Enbridge , Algonquin could be biggest bargains in the market rn. $ENB $AQN
Raising dividends 👍￼
The timing of Omicron panic and cases in western ally countries (South Africa, Belgium, the Netherlands, Spain, Canada, etc.) strikes me as an awfully convenient way to attack the oil price and give a big #$%$ to OPEC after the total failure of the strategic reserve release to impact oil prices. This, Omicron, is having the desired effect. Now we have Powell, a master of timing typically in his orchestration of markets, calling for a faster taper amid the panic. Toooooooo convenient in my books. Your play OPEC. What would I do? Slam the brakes on production and oil shipments amidst "an abundance of caution on the impact of Omicron on the global recovery". I guess we will see if I am right next week. This strikes me as market manipulation at the highest levels of power. Further, the press seems intent on talking about the contagiousness of the new variant while at the same time not giving exposure to the fact that the doctors in South Africa treating patients with this new variant are experiencing "very mild" symptoms!!! Omicron is actually what we all desperately want, a dominant strain of weak COVID! SHHHHHHHHHH. Don't tell the markets! We need that oil price to come down to protect ourselves from the angry populace!
This is a stock you hold for years/decades and enjoy the dividend income. If a 2-week swing scares you, maybe this isn't a company you should be investing in.
good lord did everybody here started investing 2 months ago??? a blue chip giant Moat stock plunges 10 - 12% and everybody panics? lol. Stick with mutual funds guys.
I notice that DRIP is not available option with Qtrade. Is it available on other platforms? or Enbridge just doesn't offer it? Thank you in advance. cheers.
CIBC upgrade $58 CAD
November 21, 2021
"Our Thoughts Heading Into The CER Decision Our Conclusion While the Canadian Mainline Contracting application is one of the most significant tolling matters the Canada Energy Regulator (CER) has considered in almost a decade, we believe the range of potential outcomes for the company is narrower than many investors realize. On that basis, we believe investors can take advantage of the recent selloff and buy Enbridge stock despite the uncertainty, as we think the risk from the CER decision may be partly offset by the possibility of share repurchases being announced at Enbridge’s investor day on December 7. We reiterate our Outperformer rating and $58 DCF-based price target."
enjoy the great and steady income.
Happy div/drip day all. Now to buy more, or move into su. Thinking hard at these prices. Market reaction overblown..
Looking forward to a lovely DRIP 💧 Wednesday; we all did quite well today considering. Have a great weekend ‘all - greetings from Kelowna BC 🇨🇦. “ONE MORE THING “(S.J. AAPL) is anyone else excited about the upcoming dividend increase announcement 📣 next month?
happy dividend day
Warren Buffett says these are the best stocks to own when inflation spikes — with high prices no longer 'transitory,' it might be time to follow his lead
Canadian energy bull unfazed by Omicron's impact on oil demand
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