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Why This High-Yield Company Will Deliver Attractive Returns

Published Fri, 24 Aug 2018 08:13:03 -0400 on Seeking Alpha

Over the last couple of years, the North American pipeline industry has seen a high amount of mergers and acquisitions. One of the companies that made a major play was Enbridge (ENB), which acquired Spectra Energy for $28 billion.
This acquisition has made the company one of the biggest pipeline operators in North America. The company benefits from massive scale and invests heavily in new projects. This will drive cash flows in the coming years, which will allow Enbridge to grow its dividend considerably going forward.
Due to an already high dividend yield, coupled with the forecasted dividend increases, Enbridge should be able to deliver a lot of income to its owners over the coming years.
A North American Pipeline Giant The vast North American pipeline industry is somewhat fragmented, although there are a couple of major companies such as Enbridge that have established a huge foothold.
Source: Enbridge presentation
Over the last couple of years, Enbridge has changed its asset portfolio significantly, moving towards a pure regulated pipelines/utility company. The company has sold a huge amount of non-core assets over the last couple of years to finance this shift in its strategy. Enbridge has, so far, announced $7.5 billion of non-core asset sales in 2018 alone.
The cash proceeds from these asset sales are reinvested into Enbridge's operations, primarily to grow the pipeline footprint further.
Enbridge, which is headquartered in Calgary, Canada,... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ENBRIDGE ENERGY MANAGEMENT 10.51   0.0 0.00 0.00 13.65
ENBRIDGE ENERGY PARTNERS LP 10.79   21.6 0.50 1.40 13.35
SPECTRA ENERGY PARTNERS LP 35.40   0.0 0.00 0.00 0.00